Monday, June 12, 2017

IPO: Eris Lifesciences

Eris Lifesciences founded by Amit Bakshi and team in 2007 is one of the fastest growing companies within the chronic and acute categories of the Indian branded formulations market such as: cardiovascular, anti–diabetes, vitamins; gastroenterology and gynaecology. The company focus on developing, manufacturing and marketing products, which are linked to lifestyle-related disorders that are chronic in nature and are treated by super specialist and specialist doctors. The chronic category contributes to over 64.2% of the company's revenues as compared to 33.4% contribution to the IPM.

Issue Price: Rs 600 - Rs 603 per share

Market Lot:

Purpose of issue:  To get the benefits of listing the equity shares on the stock exchange, the existing shareholders and promoters will sell their stake through this OFS. Also, PE firm ChrysCapital (77% of OFS) is selling its stake.
The offer: The offer is of up to 28,875,000 equity shares of face value of Re 1 each, which represent 21% of the post issue paid-up share capital.

Book Running Lead Managers: Axis Capital Limited, Citigroup Global Markets India Private Limited, and Credit Suisse Securities (India) Private Limited.

Size of the issue: Rs 1,741 crore at the upper end.

Issue Open:
 Jun 16, 2017 - Jun 20, 2017

Listing of the issue: 
The shares will be listed on the BSE and NSE

Looking at company’s historical performance, the company has delivered revenue growth of 17% CAGR during FY13-17. During the same period, the company’s PAT has grown at 43% CAGR. Furthermore, in FY17, the company made two acquisitions (Kinedex Healthcare and Amay Pharma’s 40 brands and Aprica Pharma) which partly aided company’s growth.

As on March 31, 2017, the company’s net worth stood at Rs 540 crore and the company enjoys a debt-free status. Its surplus cash and cash equivalents are Rs 261 crore.
Moreover, it enjoys tax exemption (under Income Tax Act, which will continue post GST) till FY24 on its sole manufacturing facility at Guwahati, Assam, which accounts for 78% of sales. The balance 22% of sales is outsourced to contract manufacturers.

The shares of Eris are expected to hit secondary market on June 29.

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