Glenmark Life Sciences Limited

Incorporated in 2011, Glenmark Life Sciences is the leading manufacturer of select high value, non- commoditized active Pharmaceutical Ingredients (APIs) in chronic therapeutic areas, including cardiovascular disease (CVS), central nervous system disease (CNS), pain management, and diabetes. The company also manufactures and sells gastrointestinal disorders, anti-infectives, and other therapeutic areas. It further operates in Contract Development and manufacturing operations (CDMO) to offer services to specialty Pharmaceutical companies. The Company currently operates four multi-purpose manufacturing facilities which are situated on leasehold manufacturing located at Ankleshwar and Dahej in the state of Gujarat, India and Mohol and Kurkumbh in the state of Maharashtra, India with an aggregate annual total installed capacity of 726.6 KL as of March 31, 2021. Since 2015, Company's facilities have been subject to 38 inspections and audits by regulators including the USFDA, PMDA, COFEPRIS, Health Canada, MFDS (Korea), EDQM, other European regulatory agencies and CDSCO conducted on a periodic basis. The facilities have also been subject to 432 inspections and audits by the customers during this period. As of March 31, 2021, Company sold the APIs in India and exported to multiple companies in Europe, North America,Latin America, Japan and ROW. As of May 31, 2021 Company owned or co-owned 39 granted patents and had 41 pending patent applications in several countries and six pending provisional applications in India. Clean Science has two production facilities at Kurkumbh (Maharashtra) with an aggregated installed production capacity of 29,900 MTPA as of March 31st, 2021. As per financial performance, Glenmark has posted total income/net profits of Rs. 1202.15 cr. / Rs. 229.51 cr. (FY18), Rs. 1405.49 cr. / Rs. 293.11 cr. (FY19), Rs. 1549.30 Cr. / Rs. 313.56 Cr. (FY20) and Rs. 1859.76 Cr. / Rs. 351.05 Cr. (FY21). So company has posted consistent high growth over last couple of years. Company has posted an average EPS of Rs. 30.09 and average RoNW of 65.88% for last three fiscals. Issue is priced at a P/BV of 10.31 as per NAV of 69.82/- on 31.03.21. As per FY21 earnings on fully diluted equity post issue, P/E is around 25.13. So issue looks reasonably priced. As per RHP, comparison between the listed peers are shown in above table.  On BRLM's front, six BRLMs are associated with this IPO, and have handled around 37 IPO in last three fiscals. From last 10 IPOs, 4 are opened below issue price and remaining are opened above issue on the day of listing. As of now, 2 are trading below price and remaining are trading above issue price. ( As on 21.07.21) As per financials, company has shown good growth, RoNW is 65.88% for last three fiscals and issue is priced at P/E of around 25.13 as per FY21 earnings. In current pandemic situation, Pharmaceuticals sector has shown good growth and with focus on expansion of medical facilities, this sector is expected to do well in future also. Performance of BRLM is good. So, we are giving SUBSCRIBE rating to this IPO for listing gains.

• 1 Glenmark Pharmaceuticals Limited