Sudeep Pharma IPO: How is Sudeep Pharma’s IPO, Know the Most Important things about this Issue
After the IPO, the promoters’ stake in Sudeep Pharma will decrease from 84 per cent to 76 per cent. The company was started in 1989. It is a pharma and food nutrition ingredients company. It operates from Vadodara in Gujarat.
Sudeep Pharma’s IPO opened on November 21. This issue is worth ₹895 crore. The company will issue new shares worth ₹95 crore in this IPO. The company has set a price band of ₹563-₹593 per share. The company will use the funds raised from the IPO to invest in a new plant at Nandesari, Gujarat.
Company Started in 1989
After the IPO, the promoters’ stake in Sudeep Pharma will decrease from 84 per cent to 76 per cent. The company was started in 1989. It is a pharma and food nutrition ingredients company. It operates from Vadodara in Gujarat. The company has two business verticals. Two-thirds of the company’s revenue comes from the Pharma, Food, and Nutrition segment. The remaining one-third comes from the Specialty Ingredients segment. About 60 per cent of the company’s revenue comes from international markets, and the remaining 40 per cent comes from the domestic market. 23 per cent of the revenue comes from the USA. Many big companies are Sudeep Pharma’s clients, including Pfizer, Intas, Mankind Pharma, Merck Group, Alembic Pharma, Aurobindo Pharma, Cadila, Micro Labs, and Danone.
Company’s Entry into Chemical Battery Space
Sudeep Pharma has formed a subsidiary company called Sudeep Advanced Materials Private. Through this company, Sudeep will enter the field of chemical batteries. This company will manufacture cathode active materials for the lithium-ion battery space. In the last three financial years, the company’s revenue CAGR has been 8 per cent. However, during this period, there has been a significant improvement in the company’s Gross Margin Profile.
EBITDA Margin 38 Per Cent
The company’s EBITDA margin in the last financial year was 38 per cent, which is good. This is higher compared to other chemical, pharma, and FMCG companies. The company will start production at its second facility of 51,200 tonnes by the end of this financial year. This will help the company meet medium-term demand.
Good Potential for Business Growth
According to the offer document, the implied valuation seems high. People are becoming more aware of health and fitness. The government is also focusing on nutrients fortification. This can support the demand for specialized food ingredients. There are also good opportunities in the pharma and food ingredients industry. According to the Red Prospectus, more than 80 per cent of the Excipients used in India are imported.
