Innova Captab IPO: Issue opens on Dec 21 with fresh issue component of Rs 320 cr

Innova Captab IPO opens on December 21

Innova Captab, the contract development and manufacturing organization for Indian pharmaceutical companies, has finalised the opening date as December 21 for its upcoming public issue. The fundraising is expected to be around Rs 570 crore, if we consider the price of Rs 448 per share, at which the pre-IPO placement issue has been undertaken recently by the company.

The subscription for the offer will be closed on December 26, while the anchor book will be launched for a day on December 20.

The initial public offering is a mix of fresh issue of shares worth Rs 320 crore, and an offer-for-sale (OFS) of 55.80 lakh equity shares by the existing shareholders.

Promoters Manoj Kumar Lohariwala and his brother Vinay Kumar Lohariwala will be selling 19.53 lakh equity shares each in the OFS. The remaining 16.74 lakh equity shares will be offloaded by the other selling shareholder Gian Parkash Aggarwal.

Innova Captab, which focuses mainly on research and development in the pharma segment has recently raised Rs 50 crore via the issue of 14,12,430 cumulative compulsorily convertible preference (CCPS) shares for Rs 354.00 per CCPS, and Rs 30 crore through the issue of 6,69,642 equity shares for Rs 448 per share.

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"Such 14,12,430 CCPS have been converted into 14,12,430 equity shares in the ratio of one equity share for every CCPS held," the company said in its red herring prospectus.

Hence, the previous fresh issue size of up to Rs 400 crore disclosed in the draft red herring prospectus has been reduced by Rs 80 crore according to the above pre-IPO placement and accordingly, the revised size of the fresh issue is up to Rs 320 crore.

Of the fresh issue proceeds, the pharma company will utilise Rs 168 crore for repaying debts availed by itself and its subsidiary and Rs 72 crore for working capital requirements. The remaining funds will be utilised for general corporate purposes.

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As of October 2023, Innova's total secured borrowings amounted to Rs 457.7 crore on a consolidated basis, while its subsidiary Univentis Medicare (UML) availed a loan of Rs 30 crore from HDFC Bank in April 2019, and Rs 145 crore from HDFC Bank in June 2023.

"The company proposes to invest Rs 23.6 crore from the net proceeds in UML, and UML will utilise this amount to repay/prepay in part or full its loans, " the company said.

Promoters including Manoj Kumar Lohariwala and Vinay Kumar Lohariwala hold 66.85 percent shareholding in the company, while the remaining 33.15 percent stake is held by public shareholders including Gian Parkash Aggarwal (28.98 percent stake) and UTI Multi Opportunities Fund I (2.82 percent).

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Apart from a contract development and manufacturing organization (CDMO) business, Innova Captab with two facilities in Baddi (Himachal Pradesh) also caters to the domestic as well as international branded generics business.

In addition, it is also looking to establish a new R&D centre in Panchkula, Haryana, and planning a new facility in Jammu.

In FY23 and Q1FY24, the company had 182 and 133 CDMO customers, respectively. Further, in the same periods, it manufactured a diverse generics product portfolio of over 600 products and marketed them under its own brands in the Indian market, while in addition, it exported branded generic products to 20 and 16 countries, respectively.

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The pharma company has recorded revenue growth at a CAGR of 50.2 percent during FY21-FY23, to Rs 926.4 crore in the year ended March FY23, while the CDMO business grew at a CAGR of 35.36 percent during the same period, to Rs 679.6 crore in FY23.

In the CDMO business, it supplies products to several key customers including Cipla, Glenmark Pharmaceuticals, Wockhardt, Emcure Pharmaceuticals, Lupin, Intas Pharmaceuticals, Eris Healthcare, Indoco Remedies, JB Chemicals and Pharmaceuticals, Zuventus Healthcare, Ajanta Pharma, and Mankind Pharma.

Innova Captab in consultation with the NSE will finalise the basis of allotment of IPO shares by December 27 and will credit equity shares to the demat accounts of successful investors by December 28.

The trading in its equity shares will commence on the BSE and NSE with effect from December 29, as per the IPO schedule.

ICICI Securities and JM Financial are acting as the merchant bankers for the issue, while KFin Technologies is the registrar of the offer.