Akums Drugs plans IPO within 3 years
2 min read 30 Apr 2023, 11:31 PM ISTThe Delhi-based company, however, would want to give the investor an exit through an IPO, since it has ongoing capital investment plans to reach the target of hitting a topline of ₹10,000 crore by the year 2028.
PremiumNEW DELHI : Akums Drugs & Pharmaceuticals Ltd, a leading contract manufacturing company in the pharmaceuticals sector, is working towards a stock market listing in two to three years, a top company executive said.
“We are planning an initial public offering (IPO) in a span of 2-3 years," joint managing director Sanjeev Jain said in an interview.
Akums manufacturers 13% of all drugs consumed in India, making them for companies like Cipla Ltd, Cadila Pharmaceuticals Ltd, Glenmark Pharmaceuticals Ltd, Novartis India Ltd and Mylan Pharmaceuticals Pvt. Ltd.
Proceeds from the IPO may help Akums give an exit to Quadria Capital (QC), a foreign investor. “Quadria Capital (QC), a healthcare focussed private equity (PE) firm from Singapore purchased a 15.1% stake in the company for a total consideration of approximately ₹500 crore—of which ₹180 crore was paid to the promoters for secondary share purchase and ₹320 crore was invested in the company," ICRA Ltd said in a report in June 2022.
“In relation to the stake purchase, the agreement had a clause, according to which the company would have to buy back the stake from QC (put option with the PE for the entire ₹500 crore infusion) in case it was unable to provide an exit to the PE via an IPO/secondary sale by March 2024," ICRA added.
The Delhi-based company, however, would want to give the investor an exit through an IPO, since it has ongoing capital investment plans to reach the target of hitting a topline of ₹10,000 crore by the year 2028. According to consolidated financial numbers available on Edge, Akums clocked ₹3,677.2 crore of net sales in FY22 and incurred losses of ₹250.8 crore.
The company plans to more than double net sales in the next five years and plans to achieve it through expansion beyond India to countries in Europe and other regions.
Going public may also help the company expand globally. “Currently, we are a large domestic player and make around 13% of total drugs consumed in the country. But our international business is a very small percentage of the total business and we plan to increase it. Getting listed on the bourses will help us grow our international presence since companies abroad prefer doing business with a listed entity. Also, it’s easier to attract good talent once a company is listed," Jain added.
The company is also expanding capacity at its existing facility, and also acquiring production facilities of other companies. “We are also expanding and coming up with a new injectable facility in Haridwar, have acquired a facility in Baddi where we will start manufacturing oral solids and liquids soon. We will also set up facilities wherever required," he added.
The company, which currently has over 1,400 clients across pharma, nutraceutical and FMCG sectors, is also focusing on growing its active pharmaceutical ingredient (API) vertical as well as nutraceuticals, injectables and other product pipeline to fuel the next round of growth.
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