Innova Captab is the second largest formulation contract development and manufacturing organization or CDMO in India

MUMBAI, June 30 (The CONNECT) - Integrated pharmaceutical company Innova Captab has filed its Draft Red Herring Prospectus (DRHP) with the markets regulator, Securities and Exchange Board of India (SEBI), seeking to raise funds through an initial public offering (IPO).

The issue with a face value of Rs 10 per equity share consists of a fresh issue of equity shares worth up to Rs 400 crore and an offer-for-sale (OFS) up to 9,600,000 equity shares by promoter and selling shareholders, which comprises of up to 3,200,000 by Manoj Kumar Lohariwala, up to 3,200,000 by Vinay Kumar Lohariwala (Promoter Selling Shareholders) and up to 3,200,000 by Gian Parkash Aggarwal (Other Selling Shareholders).  

Market source estimate it to raise anywhere between Rs 700-900 cr.

The proceeds from its fresh issuance worth Rs. 180.5 crore to clear some debt, Rs 29.50 crore for investment in subsidiary UML for repayment and Rs 90 crore for funding working capital requirements and for general corporate purposes.

The Panchkula-based drugmaker, in terms of operating revenue, was the second largest formulation contract development and manufacturing organization or CDMO in India in Fiscal 2021.

According to a CRISIL report quoted in the DRHP, fourteen of the top fifteen large Indian pharmaceutical companies in the domestic formulation market are its customers. For the nine months ended December 31, 2021, it had 164 CDMO customers, including Cipla Limited, Glenmark Pharmaceuticals Limited, Wockhardt Limited, Corona Remedies Private Limited, Emcure Pharmaceuticals Limited, Lupin Limited, Intas Pharmaceuticals Limited, Leeford Healthcare Limited, Medley Pharmaceuticals Limited, Cachet Pharmaceuticals Limited, Eris Healthcare Private Limited, Indoco Remedies Limited, J. B. Chemicals and Pharmaceuticals Limited, Oaknet Healthcare Private Limited, Zuventus Healthcare Limited, Ajanta Pharma Limited, Mankind Pharma Limited and Smart Laboratories Private Limited.

Its main competitors are Suven Pharmaceuticals Limited, Torrent Pharmaceuticals Limited, Ajanta Pharma Limited, Eris Lifesciences Limited, Indoco Remedies Limited, J. B. Chemicals and Pharmaceuticals Limited, Laurus Labs Limited, NATCO Pharma Limited and Windlas Biotech Limited.

Innova Captab has an extensive network of over 96,000 retail pharmacies and above 3,400 distributors and stockists, with a diverse generics product portfolio manufacturing in excess of 400 items and markets under its own brands in the Indian market and exports its branded generic products to 17 countries.

The company has two manufacturing facilities in Baddi, Himachal Pradesh and a new facility to come up in Jammu. Its facilities have good manufacturing practises (GMP) certifications from the Himachal Pradesh Health and Family Welfare Department.

The company’s revenue from operations grew 10% to Rs 410.66 crore for Fiscal 2021 from Rs 373.32 crore for the same period, and profit after tax grew 23.70% to Rs 34.50 crore for Fiscal 2021 from Rs 27.89 crore for Fiscal 2020. For nine month ending December 2021, revenue from operations stood at Rs 584.12 crore and profit after tax at Rs 50.88 crore.  

The Indian CDMO market grew at a CAGR of 14% from fiscal 2016 to fiscal 2020, and is expected to continue in the next five years from fiscal 2021 to fiscal 2026 on the back of strong growth sustained by the global pharmaceutical industry and rise in India’s export potential, it is projected that the Indian CDMO market (including domestic and exports) to grow at a CAGR of approximately 14-16% from Rs. 1.01 trillion in fiscal 2021 to Rs. 2.0 to 2.05 trillion in fiscal 2026.

ICICI Securities Limited and JM Financial Limited are the book running lead managers and KFin Technologies Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.