Shares of Akums Drugs and Pharmaceuticals Ltd. listed on the BSE on Tuesday at Rs 725 apiece, a premium of 6.7% over its issue price of Rs 679 per share. Even on the National Stock Exchange, the stock debuted at Rs 725 per share.
The initial public offering of the pharma major was subscribed to 63.56 times on its final day, led by demand from retail and non-institutional investors. The pharma major raised Rs 1,856.7 crore via a fresh issue of equity shares worth Rs 680 crore and an offer for sale of 1.73 crore shares by promoters and an existing investor.
Proceeds from the fresh issue will be used to repay debt, fund the working-capital requirement, pursue inorganic-growth initiatives through acquisitions and general corporate purposes.
The company is currently working at a 40–45% of capacity and has already set up a few plants, which are yet to be operational, according to Managing Director Sanjeev Jain.
As a contract-development-and-manufacturing-organisation player, Akums has to make sure it has enough capacity to meet requirements of the market. Peak capacity utilisation of 60% is easily achievable, Jain said. "We can even go further but whenever we reach at 50% capacity, we make sure more plants are built so that enough spare capacity is there."
Jain attributed the low Ebitda margin of 12.5% to lags of generic marketing and active-pharmaceutical-ingredient business. However, he said both the businesses would not be making losses now.
On exports, he said Akums has two European good-manufacturing-practice-certified plants that have not been leveraged till date, adding that the company is present in more than 60 countries.
Business
The contract development and manufacturing organisation offers a comprehensive range of pharmaceutical products and services in India and overseas.
It owns the intellectual property for the manufacturing processes of several formulations, and its core business is focused on providing end-to-end product development and manufacturing solutions to clients.
Some of their other services include formulation research and development, preparation and filing of regulatory dossiers in the Indian and global markets. The company is also engaged in the manufacturing and sale of branded pharmaceutical formulations and active pharmaceutical ingredients.
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