Glenmark Life Sciences IPO opens tomorrow: Issue size, price, lot size, company financials and other details

2) IPO Dates

The offer will open for subscription on July 27 and will close on July 29, 2021. Anchor book, if any, will open for bidding for a day on July 26, a day before the issue opens.

3) Price Band and Fund Raising

The price band for public offer has been fixed at Rs 695 - Rs 720 per equity share.

The company is planning to raise Rs 1,497.85 crore at the lower, and Rs 1,513.6 crore at the higher end of the price band.

4) Objectives of the issue

Glenmark Life Sciences will use the proceeds for payment of outstanding purchase consideration to the promoter for spin-off of the API business from the promoter into the company pursuant to the Business Purchase Agreement dated October 9, 2018 (Rs 800 crore), for funding capital expenditure requirements (Rs 152.76 crore), and for general corporate purposes.

5) Lot Size and Reserved Portion Category-wise

The minimum application that can be made by an investor would be for 20 equity shares and in multiples of 20 equity shares thereafter. Retail investors can invest a minimum of Rs 14,400 per lot and the maximum investment would be Rs 1,87,200 (for 13 lots) at the higher end of the price band, as they are allowed to invest up to Rs 2 lakh.

The company in consultation with merchant bankers decided to reserve up to 50 percent of the offer for qualified institutional buyers, up to 15 percent for non-institutional bidders, and up to 35 percent for retail individual bidders.

All potential bidders, other than anchor investors, have to mandatorily utilise the Application Supported by Blocked Amount (ASBA) process.

6) Company Profile

In 2019, the API manufacturing business of Glenmark Pharma was sold and spun off into Glenmark Life as part of a broader reorganization designed to place Glenmark Pharma on an accelerated trajectory to attain its objectives in three different verticals, with Glenmark Life focusing on the API business. Following the spin-off, the company operates as an independent, professionally-managed global API business.

Glenmark Life Sciences is a leading developer and manufacturer of select high value, non-commoditized active pharmaceutical ingredients (APIs) in chronic therapeutic areas, including cardiovascular disease (CVS), central nervous system disease (CNS), pain management and diabetes, as per Frost & Sullivan report. It also manufactures and sells APIs for gastro-intestinal disorders, anti-infectives and other therapeutic areas.

The company has strong market share in select specialized APIs such as Telmisartan (anti-hypertensive), Atovaquone (anti-parasitic), Perindopril (antihypertensive), Teneligliptin (diabetes), Zonisamide (CNS) and Adapalene (dermatology). The company also increasingly provides contract development and manufacturing operations (CDMO) services to a range of multinational and specialty pharmaceutical companies.

As of March 2021, Glenmark Life had a portfolio of 120 molecules globally and sold APIs in India and exported APIs to multiple countries in Europe, North America, Latin America, Japan and the rest of the world (ROW). As of May 31, 2021, it had filed 403 Drug Master Files (DMFs) and Certificates of suitability to the monographs of the European Pharmacopoeia (CEPs) across various major markets (i.e. United States, Europe, Japan, Russia, Brazil, South Korea, Taiwan, Canada, China and Australia).

As of March 31, 2021, 16 of the 20 largest generic companies globally were its customers.

It currently operates four multi-purpose manufacturing facilities at Ankleshwar and Dahej in Gujarat, and Mohol and Kurkumbh in Maharashtra with an aggregate annual total installed capacity of 726.6 KL as of March 31, 2021.

The company intends to increase its API manufacturing capabilities at Ankleshwar facility during FY22, and Dahej facility during FY22 and FY23 by an aggregate annual total installed capacity of 200 KL. This additional production capacity is expected to help the company further expand generic API production and also grow oncology product pipeline.

7) Strengths and Strategies

a) It has leadership in select high value, non-commoditized APIs in chronic therapeutic areas.

b) It has strong relationships with leading global generic companies.

c) It has quality-focused compliant manufacturing and R&D infrastructure.

d) It is focused on sustainability in operations through meaningful interventions in environment management, safety initiatives in operations and occupational health of workforce.

e) It strives to achieve cost leadership across products through careful monitoring and continuous effort.

f) It has a professional and experienced management team with proven track record.

Strategies

a) It intends to expand the geographic focus, API portfolio and scope of its operations.

b) It intends to grow its CDMO business.

c) It intends to expand its production capacities.

d) It continually aims to improve financial performance by focusing on enhancing operational efficiencies.

8) Financials

Glenmark Life reported profit for the financial year FY21 at Rs 351.58 crore on revenue of Rs 1,885.16 crore, against profit of Rs 313.09 crore on revenue of Rs 1,537.31 crore in FY20. Profit in the financial year FY19 stood at Rs 195.59 crore on revenue of Rs 886.42 crore.

9) Promoters and Management

Glenmark Pharmaceuticals is the promoter of the company, holding 100 percent of the pre-offer stake in Glenmark Life.

Glenn Saldanha is the Chairman and non-executive director of the company. He holds a bachelor's degree in pharmaceutical sciences from University of Bombay. He also holds a master's degree in business administration from the Leonard N. Stern School of Business at New York University. He is also the chairman and managing director of promoter, Glenmark Pharmaceuticals.

VS Mani is a non-executive director of the company. He is a qualified chartered accountant. Prior to joining the company, he was the president (finance) at the Bhartiya City Developers, and chief financial officer at Cipla. He is also an executive director and global chief financial officer of Glenmark Pharmaceuticals.

Yasir Rawjee is the Managing Director and Chief Executive Officer of the company. He holds a bachelor's degree in science from St. Xavier’s College, University of Bombay and a bachelor’s degree in science (technology) from University Department of Chemical Technology, University of Bombay. He also holds a PhD from Texas A&M University, USA. Prior to joining the company, he was the head of global API operations at Mylan Laboratories, senior vice president at Matrix Laboratories, and has worked in GlaxoSmithKline in the USA.

Sumantra Mitra is the executive director and vice president – human resources department of the Company. He holds a bachelor's degree in social work from Visva Bharati University and a master's degree in social work from University of Pune. He holds a diploma in labour law and labour welfare from Symbiosis Society's Law College, Pune. Prior to joining Glenmark Life, he was the vice president – human resources at Nilkamal, also worked with Mahindra & Mahindra in the automotive sector, and Glenmark Pharmaceuticals.

Sridhar Gorthi, Manju Agarwal, Taruvai Laxminarayanan Easwar, and Gita Nayyar are Independent Directors on the board.

Bhavesh Pujara is the Senior Vice President and Chief Financial Officer of the company. He is a chartered accountant from the Institute of Chartered Accountants of India. He also has a degree in bachelor of commerce from the Maharaja Sagajirao University of Baroda. Prior to joining the company, he has worked with Lupin. He has also been associated with Eli Lilly and Company (India), and Dr. Reddy's Laboratories.

10) Allotment, refunds and listing dates

Glenmark Life will finalise the IPO share allotment around August 3, and the funds will be refunded or unblocked from ASBA account around August 4, 2021.

Eligible investors will get their shares in their demat accounts around August 5, and shares will debut on the bourses on August 6.
Its equity shares are proposed to be listed on BSE and NSE.

Kotak Mahindra Capital Company, BofA Securities India and Goldman Sachs (India) Securities are the global co-ordinators and book running lead managers to the offer. DAM Capital Advisors, BOB Capital Markets and SBI Capital Markets are the book running lead managers to the offer.