Pharma Giant Corona Remedies Gears Up for ₹655 Crore IPO: PE-Backed Firm Eyes Market Debut!

Ahmedabad-based pharmaceutical company Corona Remedies is preparing for its significant market entry with an Offer-for-Sale (OFS) Initial Public Offering (IPO) valued at ₹655 crore. The subscription period for this IPO is scheduled from December 8 to December 10, with shares being offered in a price band of ₹1,008 to ₹1,062 per share.

The IPO Announcement

• Corona Remedies, a prominent name in the Indian pharmaceutical sector, has announced its upcoming IPO, aiming to raise ₹655 crore through an Offer-for-Sale.
• The IPO subscription window will be open to investors from December 8 to December 10.
• The company has set a price band for its shares at ₹1,008 to ₹1,062 per equity share.

Company Background and Growth

• Founded in 2004 with an initial capital of just ₹5 lakh, Corona Remedies has grown substantially over the years.
• It is now recognized as one of the fastest-growing among India's top 30 pharmaceutical companies.
• The company focuses on key therapeutic areas including women’s healthcare, urology, pain management, and cardio-diabeto segments.

Financial Performance

• For the fiscal year 2025 (FY25), Corona Remedies reported a robust revenue of ₹1,196.4 crore.
• The company also achieved a Profit After Tax (PAT) of ₹149.43 crore in the same fiscal year.
• Corona Remedies operates with a cash-generative business model and is currently debt-free.

Expansion and Future Plans

• The company is strategically expanding its reach with a robust export strategy, targeting multiple international markets.
• A new, ₹120-crore hormone manufacturing facility in Ahmedabad is nearing completion and is expected to become functional by Q2 or Q3 of FY27.
• This new facility is intended for niche export markets, excluding the US and Japan, covering regions like Europe, South Africa, Canada, Australia, Asia, and CIS countries.

Investor Journey and PE Backing

• The growth trajectory of Corona Remedies has been significantly supported by private equity investments.
• In 2016, private equity firm Creador invested ₹100 crore for a 19.5% stake.
• In 2021, ChrysCapital acquired Creador’s stake for ₹2,500 crore, becoming a major investor with a 27.5% holding.
• The current IPO involves ChrysCapital divesting 6.59% and promoters divesting 3.5% of their stakes.

Founder's Vision

• Nirav Mehta, Managing Director and CEO, shared the journey from a humble ₹5 lakh start-up to its current standing.
• He highlighted the company's focus on internal accruals for growth and overcoming early financial challenges, including mortgaging personal assets.
• The name 'Corona' was inspired by the Sun's corona, symbolizing ambition and brightness.

Impact

• This IPO introduces a new, well-backed pharmaceutical entity to the Indian stock market, potentially offering investors diversification in the healthcare sector.
• The expansion plans, especially the hormone facility, signal continued growth and international ambition for Indian pharmaceutical companies.
• The success of this IPO could boost investor confidence in other mid-sized pharma companies looking to go public.
• Impact rating: 7/10

Difficult Terms Explained

• IPO (Initial Public Offering): The first time a private company offers its shares to the public, allowing it to be listed on a stock exchange.
• OFS (Offer-for-Sale): A method in an IPO where existing shareholders (like promoters or investors) sell their shares to the public, rather than the company issuing new shares.
• PAT (Profit After Tax): The profit remaining after all expenses, including taxes, have been deducted from the total revenue.
• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization): A measure of a company's operating performance, excluding financing costs, taxes, and non-cash expenses.
• Private Equity (PE): Investment made by firms in private companies, often in exchange for equity. These firms aim to improve the company's performance and exit with a profit.