Senores Pharmaceuticals IPO: Rs 500 Crore Fresh Shares, Opens Dec 20

Senores Pharmaceuticals IPO

Senores Pharmaceuticals IPO: Gujarat-Based Pharma Company to Launch IPO on December 20, Fresh Shares Worth Rs 500 Crore to Be Issued

Senores Pharmaceuticals, a prominent Gujarat-based pharmaceutical company, is set to launch its Initial Public Offering (IPO) on December 20, 2024.

The company, which specializes in manufacturing critical care injectables and Active Pharmaceutical Ingredients (APIs), has filed a Red Herring Prospectus (RHP) with the Registrar of Companies, detailing its plan to raise fresh capital to fund its expansion and growth initiatives.

The IPO will comprise the issuance of fresh shares worth Rs 500 crore, along with an Offer for Sale (OFS) of 21 lakh equity shares by existing shareholders, including the company’s promoters.

IPO Highlights

• IPO Opening Date: December 20, 2024
• Subscription Period: December 20-24, 2024
• Price Band: To be announced soon
• Fresh Issue Size: Rs 500 crore
• Offer for Sale (OFS): 21 lakh equity shares
• Employee Reservation: 75,000 equity shares

This public issue is expected to generate significant interest among investors, given the company’s robust growth trajectory, strong financials, and expansion plans.

The IPO is poised to provide a major opportunity for retail, institutional, and qualified investors to participate in the company’s future growth story.

Offer Structure and Stakeholders

The IPO consists of two components: a fresh issue of shares and an Offer for Sale (OFS) by existing shareholders.

• Fresh Issue: Senores Pharmaceuticals will issue fresh equity shares worth Rs 500 crore to the public. The funds raised from this fresh issue will be used for various purposes, including capacity expansion and debt repayment, as detailed below.
• Offer for Sale (OFS): Existing shareholders, including the promoters and other stakeholders, will sell a total of 21 lakh equity shares in the IPO. Of these, 11 lakh shares will be sold by the promoters — Swapnil Jatin Bhai Shah, Ashok Kumar Vijay Singh Barot, and Sangeeta Mukur Barot — while the remaining 10 lakh shares will be sold by Prakash M Sanghvi, an existing shareholder. This sale will allow the selling shareholders to partially exit their investment in the company.

At the time of filing the RHP, the promoters collectively hold 66.67% of the company’s shares, with the remaining 33.33% held by the public, including members of the Sanghvi family.

IPO Subscription and Allocation

Investors will be able to subscribe to the IPO from December 20 to December 24, 2024. The IPO will also be open for anchor investors on December 19, 2024, a day before the general subscription opens.

The share allocation for different investor categories will be as follows:

• Qualified Institutional Buyers (QIBs): 75% of the net issue (excluding the employee portion)
• Non-Institutional Investors (NIIs): 15% of the net issue
• Retail Investors: 10% of the net issue
• Employee Reservation: 75,000 equity shares reserved for employees of the company

This allocation structure reflects the company’s focus on attracting institutional investors while also providing retail investors and employees a chance to participate in the offering.

Use of IPO Proceeds

The funds raised through the fresh issue of shares will be utilized for several key strategic initiatives aimed at strengthening the company’s market position and driving long-term growth. The company has outlined the following purposes for the use of the IPO proceeds:

1. Manufacturing Facility Expansion: A significant portion of the funds, approximately Rs 107 crore, will be used to set up a new manufacturing facility for the production of sterile injections at Senores Pharmaceuticals’ Atlanta facility. This expansion will enable the company to meet growing demand in its core markets and enhance its production capabilities for critical care injectables, a key area of its business.
2. Debt Repayment: Around Rs 93.7 crore will be used to repay existing debt, helping the company reduce its interest burden and improve its financial flexibility. Debt reduction is a key part of the company’s strategy to strengthen its balance sheet and improve profitability in the long term.
3. Working Capital Requirements: Senores Pharmaceuticals plans to allocate Rs 102.74 crore towards its working capital requirements. This will help the company manage day-to-day operational expenses and support its growth initiatives, including expanding its product portfolio and increasing sales across international markets.
4. Inorganic Growth and Corporate Purposes: The remaining funds will be utilized for inorganic growth opportunities and general corporate purposes, allowing the company to explore strategic acquisitions and partnerships that complement its existing business.

Listing and Trading

Senores Pharmaceuticals plans to list its shares on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on December 30, 2024. This listing will provide investors with an opportunity to trade the company’s shares in the secondary market.

Company Overview

Senores Pharmaceuticals is a leading player in the global pharmaceutical industry, with a strong focus on manufacturing critical care injectables and APIs.

The company operates in several regulated markets, including the United States, Canada, and the United Kingdom, while also expanding its presence in emerging markets across 43 countries.

Its product portfolio includes life-saving injectables used in critical care settings, as well as a range of active pharmaceutical ingredients (APIs) used in the production of a variety of generic drugs.

Financial Performance

Senores Pharmaceuticals has experienced significant growth in recent years, both in terms of revenue and profitability. The company’s financial performance for the fiscal year 2024 reflects the success of its strategic initiatives:

• Net Profit: The company’s net profit grew nearly fourfold to Rs 32.7 crore in FY 2024, up from Rs 8.4 crore in FY 2023.
• Revenue: Revenue for FY 2024 surged by fivefold, reaching Rs 214.5 crore compared to Rs 35.3 crore in the previous fiscal year.
• Half-Yearly Performance: For the six-month period ending September 2024, the company reported a net profit of Rs 23.94 crore on revenue of Rs 181 crore, further demonstrating its robust growth momentum.

Market Opportunity and Future Outlook

The pharmaceutical industry, particularly the critical care injectables segment, presents significant growth opportunities.

With a strong presence in regulated markets and a focus on expanding into emerging markets, Senores Pharmaceuticals is well-positioned to capitalize on rising demand for generic drugs and injectable formulations worldwide.

The company’s healthy financials, coupled with its expansion plans, make it an attractive investment opportunity for both institutional and retail investors.

Final Remarks

Senores Pharmaceuticals’ upcoming IPO presents an exciting opportunity for investors to participate in the growth of a leading pharmaceutical company.

With a solid business model, strong financial performance, and plans for significant expansion, Senores is poised to continue its upward trajectory in the global pharmaceutical market.

The IPO proceeds will enable the company to invest in its manufacturing capabilities, reduce debt, and meet working capital needs, positioning it for sustained growth in the years ahead.