Bain-backed Emcure Pharma's $234 mln India IPO draws $11 bln in bids

Abbott India

05/07/2024 13:22

By VarunVyas Hebbalalu and Kashish Tandon
       BENGALURU, July 5 (Reuters) - India's Emcure
Pharmaceuticals  EMCU.NS  drew strong interest for its $234
million initial public offering (IPO) as investors bet on its
slate of women's healthcare and HIV treatments to drive growth
in a high-margin market.
    The Bain Capital-backed company's IPO was fully subscribed
on the first day of bidding and over the three-day process, it
got bids worth up to 937.11 billion rupees ($11.23 billion),
nearly 68 times the amount on offer, exchange data showed.
    Bain sold nearly a third of its 13.07% stake in Emcure, with
existing investors overall selling shares worth 11.52 billion
rupees.
    Emcure raised 8 billion rupees by issuing new shares in the
IPO, which valued the company at up to 190.60 billion rupees,
per Reuters calculations.
    Emcure is going public in India's red-hot IPO market where
more than 100 companies have raised around $4.6 billion through
IPOs so far this year, more than double the same period last
year, as per LSEG data.
    Analysts are betting on its focus on areas such as
gynaecology, where it has a market-leading 14% share, and HIV
treatments. The generics market is dominated by firms such as
Sun Pharma  SUN.NS , Mankind Pharma  MNKI.NS , Torrent Pharma
 TORP.NS  and Abbott India  ABOT.NS .
    Institutional buyers, including foreign investors, banks and
mutual funds, bid for 196 times the shares on offer, while
retail investors bid for seven times their reserved shares.
    Anchor investors, including Goldman Sachs and Abu Dhabi
Investment Authority (ADIA), had earlier bought shares worth a
total of 5.83 billion rupees.
    Emcure's expansion-related spending has hit earnings over
the last two years but the ramp-up of facilities will boost
sales in the near term, said Sneha Poddar, vice president of
research at Motilal Oswal Financial Services.
    The stock's price-to-earnings ratio of 36.6 is also
attractive compared to the industry average of 40.4, and can
help it "pop" in its trading debut, analysts said.
 
 ($1 = 83.4690 Indian rupees)

 (Reporting by Kashish Tandon and Varun Hebbalalu in Bengaluru;
Editing by Savio D'Souza)
 ((Kashish.Tandon@thomsonreuters.com; 8800437922;))