About the Company
Akums Drugs and Pharmaceuticals Limited, founded in 2004, is a prominent contract development and manufacturing organization (CDMO) serving the pharmaceutical industry. The company provides a wide array of products and services both in India and internationally, including product development, manufacturing, research, and development of formulations. Additionally, Akums manufactures and sells branded drugs and active pharmaceutical ingredients (APIs). As of September 30, 2023, Akums operates 10 manufacturing units with a total production capacity of 49.21 billion units annually. The company plans to expand its production capacity by adding two more units for its CDMO business by FY 2025.
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IPO Details
The IPO subscription for Akums Drugs and Pharmaceuticals Limited will open on July 30 and close on August 1. The ₹1,857 crores book-building issue has a price band of ₹646 to ₹679 per share. The IPO consists of a fresh issue of ₹680 crores and an offer for sale of 1.73 crores shares. The company's promoters, Sanjeev Jain, Sandeep Jain, and Akums Master Trust, currently hold an 84.94% stake in the company. In the OFS, investors Ruby QC Investment Holdings Pte Ltd would be offloading 1.43 crores shares, while promoters Sanjeev and Sandeep Jain will each sell 15.12 lakh equity shares. The weighted average cost of acquisition for Ruby was Rs 231.64 per share.
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The book running lead managers for the Akums Drugs and Pharmaceuticals IPO are ICICI Securities Ltd, Axis Bank Ltd, Citigroup Global Markets India Private Ltd, and Ambit Private Ltd. The registrar for the offering is Link Intime India Private Ltd.
IPO Objectives
The funds raised from the IPO will be used for debt repayment of its subsidiaries (Maxcure Nutravedics and Pure and Cure Healthcare), meeting incremental working capital requirements, and supporting inorganic growth initiatives through acquisitions.
Financial Performance and Competitors
In FY24, Akums Drugs and Pharmaceuticals' revenue increased by nearly 14% to ₹4,212.21 crores from ₹3,700.93 crores in FY23. However, the company's profit-after-tax saw a sharp decline of 99.1%, dropping to ₹79 lakh in FY24 from ₹97.82 crores in FY23. The net worth slightly decreased by 1% to ₹709.5 crores from ₹717.19 crores in FY23. Akums is one of the largest Indian CDMOs focused on the domestic market, holding a market share of 9.3% by value in the Indian domestic CDMO market in FY23. The company also had a 29.4% market share by value in FY23 within the Indian domestic CDMO market. Key competitors include other contract manufacturers like Tirupati Medicare and Innova Captab Ltd, who offer outsourcing services for pharmaceutical and nutraceutical product production.
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