The subsidiary of pharma major Glenmark Pharmaceuticals, Glenmark Life Sciences, is expected to raise around Rs 1,500 crore through its initial public offering (IPO). The offer will open on July 27 and close on July 29.
The price band for the offer has been fixed at Rs 695-720 per equity share. Glenmark Life Sciences wants to pay off outstanding purchase consideration to the promoter for the spin-off of the API business via a fresh issue worth Rs 1,060 crore. Other than a fresh issue, an offer for sale of 63 lakh equity shares by promoter Glenmark Pharmaceuticals will also be made.
After paying off the debt, the company plans to utilise its cash flow from operations to fund investment for growth. The company's top executive hinted that the future funds will be for the expansion of capacity and for potential inorganic growth as well.
The company is in the API (Active Pharmaceutical Ingredient) business. It is estimated that the API market will reach USD 259 billion in FY 2026. Glenn Saldanha, MD and CEO, Glenmark Pharmaceuticals, said, “During the COVID pandemic, there has been a change in the pharmaceutical and APIs industry. We have seen a huge inflow of business in API.”
Commenting on the demand, Yasir Rawjee, MD and CEO, Glenmark Life Sciences told The Free Press Journal, “We see a strong demand -- COVID has created that. In addition, many companies and countries that want to diversify their supply chain are looking at India as well. This demand is likely to continue.”
Rawjee added, “We had disproportionate demand coming from our customers.” Going forward, the challenge for the company will be meeting the demand while maintaining quality. He stressed, “We will not have any downside in demand. But we will have to deliver the right quality and right price.” Rawjee further said China plus one is real and it is pursued by many customers. This has driven demand for APIs coming from India.
The company operates in well-regulated markets and is looking at expanding its presence in South Korea, Taiwan, Russia, Brazil, Mexico and Saudi Arabia. It is looking to create new opportunities by utilising manufacturing through local partnerships (in countries it does not have presence in). The company is looking at growth coming from India as well in times to come.