Akums Drugs and Pharmaceuticals IPO to hit Dalal Street on July 30

Akums Drugs and Pharmaceuticals IPO

Delhi-based Akums Drugs and Pharmaceuticals, a contract development and manufacturing organisation (CDMO), has decided to launch its initial public offering next week on July 30. The price band for the offer will be announced on July 25.

The IPO is a combination of fresh issuance of shares worth Rs 680 crore, and an offer-for-sale (OFS) of 1.73 crore equity shares by the existing shareholders.

Promoters Sanjeev Jain and Sandeep Jain will be selling 15.12 lakh equity shares each in the OFS, while investor Ruby QC Investment Holdings Pte Ltd will be offloading 1.43 crore shares. The weighted average cost of acquisition for Ruby was Rs 231.64 per share.

Promoters hold 82.44 percent stake in the pharma company, 14.65 percent shares are held by Ruby QC Investment, while the remainder 2.91 percent shares are owned by employee trusts.

Also read: Global investment firm OrbiMed-backed Suraksha Diagnostic files IPO papers with SEBI

The maiden public issue includes a reservation of up to Rs 15 crore worth shares for the company's employees. The issue less than employees' portion is the net issue.

Akums has reserved 75 percent of the issue size for qualified institutional buyers, 15 percent for non-institutional investors, and the remaining 10 percent for retail investors.

The Akums Drugs IPO will close on August 1, while the anchor book, the part of qualified institutional buyers' portion, will be opened for a day on July 29.

The net fresh issue proceeds will be utilised for repaying the debts of the company and its subsidiaries (Maxcure Nutravedics and Pure and Cure Healthcare). Additionally, the IPO funds will be allocated for incremental working capital requirements and inorganic growth initiatives.

The company, which claimed to be the largest India-focused CDMO in terms of revenue, production capacity and clients served during FY23, had a market share of 30.2 percent of the Indian domestic CDMO market by value in the fiscal 2024.

The Indian domestic CDMO market is anticipated to grow at a CAGR of 14.3 percent between FY24 and FY28, nearly doubling its historical growth rate. Moreover, the market size of Indian domestic CDMO market is forecasted to grow to $2.8 billion during FY28.

Akums operates 10 manufacturing units for the CDMO business, with a cumulative formulations manufacturing capacity of 49.23 billion units annually in the FY24. Further, its new injectable facility is expected to be operational in the current fiscal 2025.

ICICI Securities, Axis Capital, Citigroup Global Markets India, and Ambit are the book running lead managers to the Akums Drugs IPO, while Link Intime India is the registrar to the offer.