Glenmark Life Sciences IPO: API Niche files paper for an IPO

Glenmark Life Sciences is a child company of leading drug maker Glenmark Pharmaceuticals. This is one of the new niches in which investors can bet in the pharma sector which is API (active pharmaceutical ingredients) which has huge potential in the next 2 3 years due to the favorable supply and demand for API.

Glenmark Life Sciences IPO

Glenmark Life Sciences has filed for a DRHP (draft red herring prospectus) to the Securities and Exchange Board of India (SEBI) for IPO. They are interested to raise 1,160 Crores through this IPO which includes an offer for sale as well as a fresh issue.

On this, the firm stated to exchange as follow –

“Glenmark Life Sciences which is a child company of group  Glenmark Pharmaceuticals has filed DRHP (draft red herring prospectus) to Sebi for an IPO on 16th April 2021. In which they are intending fresh issue of 11,600 million and an offer for sale 7,305,245 equity shares of Rs 2 each of GLS.”

According to prospectus Kotak Mahindra Capital, Bofa Securities, Goldman Sachs are the leading investment bankers working on this IPO.

Need for an IPO –

  • Payment of outstanding purchase.
  • Funding API business capitals.
  • General corporate purpose.

Glenmark Life Sciences – API Story

2 years ago Glenmark Pharmaceuticals have tried to sell their minority stake in Glenmark Life Sciences API business for funds but they couldn’t get success in the same. 

As per the stats mentioned on the website, Glenmark Life Sciences supplies 130 APIs to 700 customers in 65 countries Europe, Japan, Asia, America, etc. And the production of APIs takes place in India where they have 5 plants for it.

The management is very confident regarding the outlook of the API industry due to demand and supply for the next 2 – 3 years. In the third quarter of the financial year 2020-21, GLS recorded sales of Rs. 501 Crores as against Rs. 409 Crores with an increase of 22.3% which is a positive sign.

In India API business grew over 50% in the third quarter so the management is looking for opportunities at Favipiravir API and already started supplying it in few countries as mentioned in result statements for the quarter.

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