Macleods Pharma files papers for IPO, likely to be one of the biggest in sector

Supriya Lifescience IPO

Mumbai-based Macleods Pharmaceuticals has filed draft papers with Sebi to list on the domestic bourses, in what is likely to be one of the biggest pharma IPOs in the recent times, sources in the know told Moneycontrol.

Moneycontrol was the first to report the listing plans of the drugmaker on July 25, 2021.

The Rs 6,480-crore IPO of Gland Pharma, which was launched in November 2020, holds the record for the biggest-ever offering in the domestic pharma segment. In August 2021, Bain Capital-backed Emcure Pharma had filed papers with the regulator for a proposed Rs 4,500 crore – Rs 5,000 crore IPO.

According to the draft red herring prospectus ( DRHP) of the vertically integrated Macleods Pharma, which specializes in the development and manufacture of APIs (active pharmaceutical ingredients) and finished dosage pharmaceutical formulations, the initial public offer will consist purely of an offer for sale or OFS.

The selling shareholders are from the promoter group and the OFS comprises 60.5 mn shares. The final size of the IPO will depend on the outcome of valuation discussions.

The DRHP says the objectives of the offer are to -

1. achieve the benefits of listing the equity shares on the stock exchanges
2. carry out the offer for sale of up to 60,482,040 equity shares by the selling shareholders

“Further, our company expects that the proposed listing of its equity shares will enhance our visibility and brand image as well as provide a public market for the equity shares in India. Our company will not receive any proceeds from the offer," the DRHP said.

Kotak Mahindra Capital, ICICI Securities, Citi, Nomura and Edelweiss Financial Services are the investment banks working on the IPO. Cyril Amarchand Mangaldas and Shardul Amarchand Mangaldas are the legal advisors.

A CLOSER LOOK AT MACLEODS PHARMA

Dr Rajendra Agarwal along with his brothers Girdhari Lal Bawri and Bandwari Lal Bawri started Macleods Pharmacuticals in 1989 with an aim to produce anti–TB medicines.

Today, the firm is the seventh largest in the Indian pharmaceuticals market based on its domestic sales and is engaged in developing, manufacturing, and marketing a wide range of formulations across several major therapeutic areas including anti-infectives, cardiovascular, anti-diabetic, dermatology, and hormone treatment. For the year ended March 2021, it clocked Rs 7,199 crores in revenues from operations with an Ebitda of 2,096 crs

The domestic business comprises of branded generics, and revenue from operations in India represented 51.73 percent of the total revenue from operations in Fiscal 2021, which was the 3rd highest proportion of domestic business among nine other key pharmaceutical companies in India. The DRHP says the firm has the highest number of WHO pre-qualified products globally with 65 registrations, and the highest number of WHO pre-qualified anti-TB product registrations with 32 registrations, as at December 31, 2021.

Its eight manufacturing units produce a range of oral dosage forms and complex formulations such as topicals, injectables and inhalers, and have obtained approvals from various regulatory bodies, including the USFDA, the U.K. Medicines and Healthcare products Regulatory Agency (the “MHRA”), the European Directorate for the Quality of Medicines (the “EDQM”) and SAPHRA. The firm also manufactures it’s own APIs primarily for products that it distributes outside India. Macloeds Pharma has a global presence in more than 170 countries across developed and emerging markets such as North America, Europe, Africa, Asia, South America, and the Commonwealth of Independent States (the “CIS”).