Pharma Giant Corona Remedies IPO Opens Dec 8: Will This ₹655 Cr Debut Be Your Next Big Investment?

Corona Remedies' Initial Public Offering (IPO) is set to open for subscription on December 8, 2023, and will close on December 10, 2023. The anchor book for the offering will be available a few days prior, on December 5. The company aims to raise ₹655.37 crore through this IPO, which is entirely an Offer for Sale (OFS).

The pharmaceutical firm has established a fixed price band for its shares, set between ₹1,008 and ₹1,062 per equity share, with each share having a face value of ₹10. This IPO presents an opportunity for investors to acquire shares in a fast-growing pharmaceutical company.

IPO Details

• Subscription Dates: December 8, 2023, to December 10, 2023.
• Anchor Book Opening: December 5, 2023.
• Price Band: ₹1,008 to ₹1,062 per share.
• Face Value: ₹10 per share.
• Total Issue Size: ₹655.37 crore.
• Issue Type: Entirely an Offer for Sale (OFS).
• Shares Offered: 61.71 lakh shares.

Company Overview

• Corona Remedies is an India-focused branded pharmaceutical formulation company.
• Its product portfolio spans key therapeutic areas including women's healthcare, cardio-diabeto (cardiovascular and diabetes), pain management, and urology.
• The company is engaged in developing, manufacturing, and marketing a wide range of pharmaceutical products.

Growth Prospects and Market Position

• According to a CRISIL Intelligence Report, Corona Remedies is recognized as the second fastest-growing company among the top 30 players in the Indian Pharmaceutical Market (IPM).
• This growth is measured by domestic sales between MAT June 2022 and MAT June 2025.
• Corona Remedies' domestic sales exhibited a Compound Annual Growth Rate (CAGR) of 16.77% during this period, significantly outperforming the overall IPM growth of 9.21%.

Offer for Sale (OFS) Explained

• An Offer for Sale means that existing shareholders are selling their shares to the public.
• In this IPO, promoters and existing investors like Sepia Investments, Anchor Partners, and Sage Investment Trust are divesting part of their stake.
• Crucially, Corona Remedies the company will not receive any proceeds from this IPO as it is solely an OFS. This means no fresh capital will be infused into the company for its operations or expansion.

Investor Allocation

• The shares are allocated across different investor categories to ensure broad participation.
• Retail Investors: 35% of the issue size.
• Qualified Institutional Buyers (QIBs): 50% of the issue size.
• Non-Institutional Investors (NIIs): 15% of the issue size.

Investment Details for Retail Investors

• Retail investors can apply for a minimum of one lot, which comprises 14 shares.
• The minimum investment at the upper price band (₹1,062) would be ₹14,868 (14 shares x ₹1,062).
• Applications must be made in multiples of 14 shares thereafter.

Market Debut

• The company is expected to list on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
• Share allotment is anticipated to be finalised by December 11, 2023.
• The shares are scheduled to commence trading on the stock exchanges on December 15, 2023.

Book Running Lead Managers

• The IPO is managed by JM Financial, IIFL Capital, and Kotak Capital.
• Bigshare Services is appointed as the registrar for the issue.

Impact

• The IPO's success could boost investor confidence in the pharmaceutical sector and attract further interest in similar companies.
• For retail investors, it offers a chance to participate in the growth story of a company with a strong track record in specific therapeutic areas.
• The performance of the stock post-listing will be closely watched as an indicator of market appetite for new pharmaceutical listings.
• Impact Rating: 7/10

Difficult Terms Explained

• IPO (Initial Public Offering): A process where a private company offers its shares to the public for the first time to raise capital.
• Offer for Sale (OFS): A method where existing shareholders sell their shares to new investors. The company itself does not issue new shares or receive funds.
• Price Band: A range within which the shares of a company will be offered during an IPO, with a floor and a ceiling price.
• Anchor Book: A pre-IPO process where institutional investors are allocated shares before the IPO opens to the general public.
• QIB (Qualified Institutional Buyer): Large institutional investors like mutual funds, pension funds, and insurance companies.
• HNI (High Net-worth Individual): Investors who invest large amounts of money, typically above ₹2 lakh. Small HNIs invest between ₹2 lakh and ₹10 lakh, and Big HNIs invest above ₹10 lakh.
• CAGR (Compound Annual Growth Rate): The average annual growth rate of an investment over a specified period, assuming profits are reinvested.
• IPM (Indian Pharmaceutical Market): Refers to the total market size and sales of pharmaceutical products within India.
• MAT (Moving Annual Total): A financial metric that calculates the total revenue or sales over the last 12 months, updated monthly.