Glenmark Life Sciences IPO – Issue Details, Review and Analysis

Glenmark Life Sciences IPO – Issue Details, Review and Analysis

Glenmark Life Sciences IPO – Issue Details, Review and AnalysisGlenmark Life Sciences IPO – Dates, Issue Details, GMP, Review, Analysis, Invest or Avoid

Glenmark Life Sciences is coming up with IPO that would open for subscription on 27th July 2021. Glenmark Life Sciences Limited is the leading manufacturer of Active Pharmaceutical Ingredients (APIs). Company generated strong revenue and margin growth in the last 3 years. Investors has been waiting for Glenmark Life Sciences IPO expected date for some time and finally it is opening on 27th July, 2021. In this article we would provide details of Glenmark Life Sciences IPO , issue details, IPO dates, promoter’s information, objects of the IPO issue, what we like, Risk Factors, Review, Analysis and whether one should invest or not.

Also Read: Rakesh Jhunjhunwala Stock Portfolio – New additions and portfolio changes

About Glenmark Life Sciences Limited

Glenmark Life Sciences is a wholly owned subsidiary of Glenmark Pharmaceuticals Limited.

It is the leading developer and manufacturer of select high value, non-commoditized active pharmaceutical ingredients (APIs) in chronic therapeutic areas, including cardiovascular disease, central nervous system, pain management and diabetes. They also manufacture and sell APIs for gastro-intestinal disorders, anti-infectives and other therapeutic areas.

Currently its products are sold in India and exported to Europe, North America, Latin America, Japan, etc. It has 4 manufacturing facilities at Ankleshwar and Dahej in Gujarat and Mohol and Kurkumbh in Maharashtra State with an aggregate annual installed capacity of 725.8 KL as of 31st December 2020.

Glenmark Life Sciences IPO date and issue details

IPO Opening Date 27-Jul-21
IPO Closing Date 29-Jul-21
Issue Type Book Built Issue IPO
Face Value Rs 2 per equity share
IPO Price band Rs 695 to Rs 720 per equity share
Lot Size 20 Shares
Min Order Quantity 20 Shares
Listing at BSE and NSE
Issue Size Total Size: Rs 1,513.6 Crores
i) OFS: Rs 453.6 Crores
ii) Fresh Issue: Rs 1,060 Crores

Glenmark Life Sciences IPO RHP SEBI Link

Glenmark Life Sciences Limited competitive strengths

1) It is leading manufacturer of selected specialized APIs for chronic therapeutic areas like CVS, CNS, diabetes, and pain management.

2) It exports products in Europe, Latin America, North America, Japan, and the rest of the world.

3) It has strong relationship with leading global generic companies.

4) Company has proven track record of strong financial performance.

5) High-quality product manufacturing with R&D infrastructure.

Objects of the IPO

It has two objects of the offer:

1) Offer for Sale (OFS) Rs 453.6 Crores: Under OFS selling shareholders would sell the shares and company would not get any proceeds from the issue.

2) Fresh issue of Rs 1,060 Crores:

i) To make payment of outstanding purchase consideration to the promoter for the spin-off of the API business from the promoter into the company.

ii) To finance capital expenditure requirements.

iii) To meet general corporate purposes.

Company promoters and Financial Performance

Glenmark Pharmaceuticals Limited is the promoter of this company.

Let us check the revenue and profit details from Glenmark Life Sciences financial statements for the past 3 years.

Period ending Total Revenues (Rs in Mns) Profits after tax
(Rs in Mns)
Profit %
Mar-19 8,868.6 1,955.9 22.1%
Mar-20 15,493.0 3,130.9 20.2%
Mar-21 18,859.7 3,515.8 18.6%

What we like in Glenmark Life Sciences?

Here are the positive factors what we liked in this company.

1) Company has posted strong revenue growth in the last 3 years. Company revenues increased from Rs 886.8 Crores in FY2019 to Rs 1,885.9 Crores in FY2021.

2) Company has posted strong growth in margins in the last 3 years. Its margins improved from Rs 195.5 Crores in FY2019 to Rs 351.5 Crores in FY2021.

3) Glenmark Life Sciences Limited is the leading manufacturer of Active Pharmaceutical Ingredients (APIs).

4) Company prospects look promising. It has leadership in select high value, non commoditized APIs in Chronic Therapeutic areas, strong relationship with global generic companies and quality focused manufacturing and R&D Infrastructure.

Risk Factors in Glenmark Life Sciences

1) Company manufacturing or quality control problems may subject to regulatory action which can damage company reputation and have adverse effect on company operations and financial condition.

2) Its business is dependent on sale of its products to its key customers. Any loss of its key customers can deteriorate its financial condition and prospects.

3) Company derives significant revenue from API business which has limited number of therapeutic categories. Its key product generates significant portion of total revenue. If these businesses do not perform well as expected, it can have impact on company financial condition.

4) Covid-19 or future pandemic can materially and adversely impact company business.

5) Its promoters and directors are involved in certain legal and regulatory proceedings. Any adverse decision in such proceedings may have material impact on business and financial condition of the company.

6) Investors should read complete risk factors indicated in the RHP of the IPO document before investing in this IPO.

Glenmark Life Sciences IPO Timetable (Tentative)

Offer Open 27-Jul-21
Offer close 29-Jul-21
Finalization of Allotment 03-Aug-21
Initiation of Refunds 04-Aug-21
Credit to Demat Account 05-Aug-21
IPO Shares Listing Date 06-Aug-21

IPO Price Valuations of Glenmark LifeScience

Its price band is Rs 695 to Rs 720.

1) On the upper price band of Rs 720 and EPS of Rs 32.61 for FY21, the P/E ratio works out to be 22x.

2) For the last 3 years average EPS of Rs 30.09, the P/E ratio is 24x.

3) Means, the company is asking price of Rs 720 on the upper price band in the P/E range of 22x to 24x.

5) There are listed peers like Divis Labs where it is trading at P/E 65x (Highest) and Aarti Drugs at P/E of 24x (Lowest) and industry average P/E is 36.7x.

Hence Glenmark Life Sciences Share Price of Rs 720 of upper price-band is reasonably priced.

Note that Glenmark Life Sciences IPO Shareholders quota (if you are holding Glenmark Pharma shares) is not available now. This was indicated in Draft prospectus (DRHP), however removed in Red Herring Prospectus (RHP).

What is the Grey Market Premium (GMP) today?

Glenmark Life Sciences IPO grey market premium (GMP) today is at Rs 250 per share. GMP is nothing but the premium at which the shares are trading in offline market.

GMP as per Sonal Patel IPO Mentor on Chittorgarh – Rs 218 -222 (per share)

GMP as per Eagle Eye IPO Guru on Chittorgarh – Rs 250 +/- 2 per share

GMP as per IPO Watch – Rs 250 per share.

GMP as per Top10stockbroker – Rs 250 per share

However, Glenmark Life Sciences IPO GMP as per Chanakyanipothi is much higher at Rs 295 per share.

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Glenmark Life Sciences IPO Review – Should you invest?

You might be wondering whether you should buy this IPO or not.

Glenmark Life Sciences Limited is the leading manufacturer of Active Pharmaceutical Ingredients (APIs).

Company generated strong revenue and margin growth in the last 3 years.

Glenmark Life Sciences IPO price is reasonably priced.

Considering all these positive factors, investors can subscribe to this IPO for short term to long term perspective.

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9 thoughts on “Glenmark Life Sciences IPO – Issue Details, Review and Analysis”

  1. Hi Suresh,

    What is your take on the listing gains, will this IPO gets boom upon listing or will it be an ordinary one.

  2. Hi,

    Why is the GMP so low, its been reducing each day. The financials don’t look bad. So what’s behind this low buzz? Also is the promoter holding a cause of concern? Is it worth going for it ?

    1. Rahul, It is unorganised market and limited tradings might happen before listing. This is just an indication as to how the price movement is happening in offline market.

  3. Hi Suresh,
    I am new to the trading/investment market so as a beginner from where should I start my investing journey.
    Are IPO’S an safe option?
    Should I go for intraday or delivery?

    1. If you are a beginner, I would recommend you to observe how stock market is running. IPOs are very high risk, however can give high returns. Picking up stocks for Intraday could be a challenge. Pls go through some of our articles on stock market section and understand how these are working. Once you get good understanding about it, you can start experimenting by considering a trade in respective segment. If you are comfortable, you can continue, else switch to another segment (like intraday or delivery or IPOs etc.,)

  4. Hi Suresh,
    I am new to stock market and IPO. After reading your blog with the detailed analysis I want to go for Glen Mark Life Sciences. Please let me know if I can go for long term let us say for 3 years?

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