Morepen Laboratories' Rs 200-Crore QIP Oversubscribed
With this, the institutional holdings in the company has surpassed 10%, according to Chairman Sushil Suri.
Morepen Laboratories Ltd. on Tuesday announced successful completion of its qualified institutional placement worth Rs 200 crore. With this, the institutional holdings in the company has surpassed 10% from 4% previously, according to Sushil Suri, chairman and managing director of the company.
The company issued 3.67 crore equity shares at Rs 54.37 per share to institutional investors. The QIP issue was oversubscribed by 1.68 times, with bids amounting to Rs 335 crore, compared to the Rs 200 crore offering.
“We initially aimed to raise Rs 200 crore, but the demand was so high that we received bids worth Rs 335 crore, nearly 1.68 times our target. Although we considered increasing the amount due to the strong interest, we decided to stick with Rs 200 crore, which aligns with our immediate growth plans,” Suri told NDTV Profit.
Morepen Laboratories initiated the QIP to strengthen its ambitious growth strategy and capitalise on emerging opportunities, Suri said.
The company has achieved a compound annual growth rate of 17-18%, which significantly exceeded the industry average of 10-12%. Within the pharmaceutical sector, the company’s Active Pharmaceutical Ingredients segment has grown steadily at a CAGR of 17-18%, the top executive pointed out.
The medical devices segment saw even more impressive growth, with a notable 27-28% CAGR annually.
Until now, the company’s expansion had been largely funded through internal accruals, and it had not participated in a major capital event for some time, Suri said. This QIP represents a crucial step for Morepen Laboratories to secure the necessary capital for its continued growth and to harness new market opportunities effectively, he said.
“We are a debt-free company and have not made substantial investments in capital expenditures or working capital. As India evolves into a manufacturing hub, there is a clear opportunity for consolidation and establishing a strong market position,” Suri said.
To capitalise on emerging market opportunities and lay the groundwork for long-term growth, Morepen Laboratories turned to institutional investors through its QIP, according to Suri.
“The move was crucial for acquiring the necessary capital to drive its expansion plans and effectively harness market potential,” he said.
Morepen Laboratories garnered support from a number of global investors, including Bank of America Securities Europe, Samsung India, Citigroup, Societe Generale, Nomura, BNP Paribas, Morgan Stanley and Eminence.
“Our focus is on strengthening our API leadership in 7-8 key products where we currently hold a market-leading position. Our strategy involves expanding capacity for these existing products to solidify our dominance. Additionally, we are committed to developing new molecules to enhance our product portfolio and sustain growth,” said Suri.
The QIP issue had received shareholders’ approval during the extraordinary general meeting held on March 18, 2024.
Shares of Morepen Laboratories was trading 2.23% lower at Rs 57.76 per share, compared to a 0.1% decline in the NSE Nifty 50 at 02:56 p.m.
