Intas Pharmaceuticals Set For Market Outing
Intas Pharmaceuticals (IPL), a company engaged in the business of pharmaceutical product formulations, is all set to enter the capital markets with its initial public offering. This IPO consists of both fresh issue and offer for sale. The issue is fully based on the book building method. Though the company has yet not disclosed the issue price band, the fresh issue aggregates to Rs 225 crore while the OFS constitutes the issue of 1.16 crore equity shares by the selling shareholders. Kotak Mahindra Capital Company and Morgan Stanley India Company are the book running lead managers for the issue.
The India-based company operates globally in the development, manufacturing and marketing of pharmaceutical products. It enjoys 2.52% market share in India and a global presence in upto 70 other countries like Europe, Africa, Australia, Asia-Pacific, America, etc. IPL mainly operates in three segments, viz. pharma, bio-pharma and animal healthcare. The company operates in major therapy areas such as neurology, dermatology, oncology, urology, pain management, ophthalmology and many others. Currently, it has 9 formulation facilities, of which 7 are located in India and 1 each in UK and Mexico. In addition, it has 2 API and intermediate manufacturing facilities.
On the financial front, IPL posted a revenue of Rs 2789 crore in FY12, registering a growth of 41% over FY11. The company's domestic sales accounted for 53.6% of its revenue while international sales contributed 42.8% of the same during the said period. Its 9MFY13 revenue stood at Rs 2716 crore. The increase in manufacturing expenses, employee expenses and other expenses has led to higher overall operating expenses, which has gone up by 39%. Helped by growth in sales in FY12, the EBITDA grew by 45% to Rs 548.53 crore.
During FY12, the bottomline was boosted to Rs 307 crore against Rs 198 crore in the previous year. Further, due to the increase in borrowings during FY2012, the finance expenses grew by 82.6%. IPL reported a rise in EBITDA margin by 65 basis points and its net margins grew by 110 basis points. Its 5-year CAGR of income was at 24% and its profit CAGR stood at 31.5%.
The company has proposed to invest the funds raised through the fresh issue to set up a new research & development facility and to meet the marketing authorisation expenses. IPL has plans to set up a new facility within the premises of the Matoda (India) facility. It will utilise Rs 68.72 crore from the net proceeds to acquire plant and machinery and other material requirement for the new facility. The company intends to receive marketing authorisation in European market for its 137 product dossiers, of which 131 have already been authorised.
The company has reported healthy growth in the previous 5 years on account of operating income and net profit. IPL is the 12th largest pharmaceutical company in India. Its peer companies like Sun Pharmaceutical Industries, Cadila Healthcare, Cipla, Glenmark Pharmaceutical and Torrent Pharmaceutical are trading at a trailing 12-month PE of 32.7x, 23.9x, 20.1x, 24.5x and 16.2x respectively. Moreover, in current scenario, we are bullish on the pharma sector. We will keep you updated as the company arrives with its issue price band and bid lot size, so keep watching this space.