India's Emcure Pharma jumps 35% in debut trade at $223 mln valuation (updated)

Emcure Pharmaceuticals

10/07/2024 05:44

(Adds analyst comments)
    By Kashish Tandon and VarunVyas Hebbalalu
       BENGALURU, July 10 (Reuters) - Indian drugmaker Emcure
Pharmaceuticals'  EMCU.NS  shares rose 34.9% in debut trade on
Wednesday, beating analysts' estimates and valuing the company
at 18.64 billion rupees ($223.3 million), as its strong presence
in women's healthcare and HIV treatments drew investors.
    In an IPO market where over 100 companies raised more than
$4.6 billion so far this year, Bain Capital-backed Emcure is the
first drugmaker to go public in 2024.
    Analysts expected Emcure's shares to list at nearly a 20%
premium. 
    The stock opened at 1,325.05 rupees on the National Stock
Exchange, compared with its offer price of 1,008 rupees.
    The company's initial public offering was oversubscribed
nearly 68 times last week, drawing bids worth $11 billion, with
Bain selling nearly a third of its 13.07% stake.
    Six pharma companies went public in 2023, with the largest
being the May 2023 debut of Mankind Pharma  MNKI.NS , also the
biggest across sectors in the year.
    Emcure's key focus areas, including gynaecology, where it
has a market-leading 14% share, and HIV treatments are expected
to drive sales growth, analysts have said.
        This and its better-than-industry average
price-to-earnings ratio of 36.6 drew investors to buy a piece of
the company. 
  
    Its gynaecology portfolio includes medicines for infertility
treatment and menstrual pain.
        Analysts will now keenly look forward to the company's
growth strategy and accordingly arrive at the fair value of the
business from the medium-term perspective, said Sunny Agrawal,
an analyst at SBI Securities. 
  
        "From a long-term perspective, we remain constructive on
the growth prospects of the pharma sector and Emcure," he said. 
  
        Emcure is India's 13th biggest drugmaker by market share
in a sector dominated by firms such as Sun Pharmaceutical
Industries  SUN.NS , Mankind Pharma  MNKI.NS  and Torrent Pharma
 TORP.NS .
  


($1 = 83.4825 Indian rupees)

 (Reporting by Kashish Tandon and Varun Hebbalalu in Bengaluru;
Editing by Sohini Goswami)
 ((varunvyas.hebbalalu@thomsonreuters.com;))