Thread by @cavarunagl

Glenmark Life Sciences IPO Review (Includes points from the IPO Press Conference)
#glenmark #glenmarklifesciences #glenmarkipo #cavarunagarwal

1. Glenmark Life Sciences is an API division doing pure play API business. Spun off in 2019 and operates as an independent professionally managed business.

2. Leading developer and manufacturer of non-commoditized APIs in chronic therapeutic areas, including cardiovascular disease (CVS), central nervous system disease (CNS), pain management, and diabetes. 120+ products.

3. Strong market share in select specialized APIs such as Telmisartan (anti-hypertensive), Atovaquone (anti-parasitic), Perindopril (antihypertensive), Teneligliptin (diabetes), Zonisamide (CNS), and Adapalene (dermatology).

4. Also provides CDMO services and growing this segment as well.

5. Operates 4 manufacturing facilities in Gujarat & Maharashtra with a total installed capacity of 726.6KL. Exports to 70+ countries

6. Will be soon a debt-free company post IPO with a strong parent group.

7. Strengths- Strong management team, Brand value, 66% Revenue from regulated markets, 16 out of 20 largest generic companies are customers, 69% of repeat business from existing customers, Long term relationships with key customers, Strong R&D team with 200+ scientists

8. Growth drivers- Plans to develop 8 to 10 molecules every year, 41 pending patent applications, growth planned in oncology/ peptides, Geographical expansion, Brownfield/ Greenfield expansions planned to expand capacities.

9. IPO size is Rs. 1514cr. Fresh issue Rs.1060Cr

10. Funds will be used to pay the promoters for spin-off of this company (800cr) and for Capex (153cr). Presently Glenmark Pharma holds 100% stake.

11. Price band is fixed at Rs 695-720 per share but the face value is Rs. 2

12. Market Cap at Rs. 720 would be around 8800cr and post listing could be above Rs.10,000cr.

13. Revenue for FY21 1886cr, EBITDA 592cr, PAT 352cr, EBITDA margin 31.40%, PAT 18.65%, FA Turnover 3.34X, ROCE 32.65%

14. 3 years CAGR Rev 16%, EBITDA 17% PAT 10%

15. PE 23 (approx) based on FY21 EPS. Makes valuation reasonable.

16. No suspicious related party transactions

17. FY21 Cash flow from operations 388cr. Capex 687cr in FY21.

18. Glenmark generates the highest RONW among its peers in the industry.

19. Key Risks is Top 5 customers constitute 57% of the Revenue

20. Overall looks like a good IPO to apply for listing gains and long term. 👍

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