Corona Remedies' Rs 655.37-Crore IPO Subscribed 1.92 Times On Day 2 — Check Details

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DRChoksey Report

Corona Remedies' initial public offering was subscribed 1.92 times on the second day on Tuesday.

Corona Remedies launched its initial public offering on December 08 and will conclude on Dec. 10. An India-focused branded pharmaceutical formulations company has fixed the price band at Rs 1,008 to Rs 1,062 Apeice.

Investors can place bids starting from a minimum of 14 shares and in multiples thereafter, meaning retail investors are required to apply for at least a single lot size, amounting to an investment of Rs 14,868 per application based on the upper end of the issue price.

Corona Remedies’ IPO worth Rs 655.37 crore, is entirely an offer-for-sale of 62 lakh shares.

Bigshare Services Pvt. Ltd. is the issue registrar, while JM Financial Ltd. is the book-running lead manager for the IPO.  

Outlook

The company has undertaken recent acquisitions like Myoril from Sanofi and Spye from Bayer. It is bolstering its gynaecology and cardiology portfolio and executed a partnership with Ferring for Solifenacin. Between FY23-25 , the revenue grew at a compounded annual growth rate (CAGR) of 18%.

The company is targeting revenue CAGR of 20% in the next 2-3 years by undertaking 15-20 new launches every year. In terms of capacity, it has expanded the Bhayla hormones facility.

As a long-term strategy, it will enter the exports market and increase its revenue contribution to 5% by FY28.

Risk Factors

• Pricing pressure: which has a high impact on revenues and being mitigated by better chronic mix.

• Regulatory: in terms of approvals from global established associations like World Health Organization (WHO), European Union (EU), Indian pharmaceutical regulator.

• Competition risk: from other generic manufacturer with risk mitigation by focusing on specialists.

Valuation Analysis

The company has a strong brand in the women’s health category. It is also ramping up other therapies like cardiology, urology and dermatology. It has consistently outperformed the Indian Pharmaceutical Market by 1.5-2x in the last 3 years.

Higher percentage of chronic portfolio provides stable revenue streams for the company. Growth in revenues will be supported by new launches every year.

Operating margins is forecasted to expand by ramping up acquired brands and increasing productivity of medical representatives. Factoring in revenue traction and margin expansion, long term investors can Subscribe to the issue.

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