Listing Report :
On 19 Dec 2016 Laurus listed At Rs. 490 and during the day moved to Rs. 498.
IPO-Analysis by Angel Broking & Jainee P. Gordhandas are given at the bottom of this page
Tentative Dates (Everything delayed by one day due to holiday on 12 Dec 2016)
Finalisation of Basis of Allotment: On or about December 14, 2016
Initiation of refunds: On or about December 15, 2016
Credit of Equity Shares to demat accounts: December 16, 2016
Commencement of trading of the Equity Shares: December 19, 2016
No of Times the IPO is subscribed
As on…………………………………… ……QIB ………..NII …………RII ……… Total
Shares Offered ……………………..6174,544 .. 4623879……..10789,051.. 21911,308
Day 1 – Dec 06, 2016 05.00.pm … 0.7085 …..0.1578…………0.0994……..0.2877
Day 2 – Dec 07, 2016 05.30.pm … 1.0186 …..0.5373…………0.3941……..0.6123
Day 3 – Dec 08, 2016 07.00.pm … 10.5395 …..3.5744…………1.5803……..4.5282
Issue Duration : Dec 6, 2016 – Dec 8, 2016
Issue Type: Book Built Issue IPO
Fresh Issue of [.] Equity Shares of Rs 10 aggregating up to Rs 300.00 Cr
Offer for Sale of 24,107,440 Equity Shares of Rs 10 aggregating up to Rs [.] Cr
Face Value per share : Rs 10
Price Band : Rs. 426 – Rs. 428 Per Equity Share
Market Lot: 35 Shares
Minimum Order Quantity: 35 Shares
Listing proposed at t: BSE, NSE
Objects of the IPO:
1) Proceed of the issue would be utilised towards payment of loans &
2) for general corporate purposes.
About the Company:
Laurus Labs is a leading research and development driven pharmaceutical company in India. The company has grown consistently to become one of the leading manufacturers of Active Pharmaceutical Ingredients (APIs) for anti-retroviral (ARV) and Hepatitis C. Laurus Labs also manufactures APIs in oncology and other therapeutic areas. Its strategic and early investments in R&D and manufacturing infrastructure have enabled it to become one of the leading suppliers of APIs in the ARV therapeutic area. Out of Ten largest generic pharmaceutical companies in the world, by revenues, are our customers.
599 Members in the R&D team
2,398 Team size
32 Countries in which we sold APIs
59Products commercialised since inception
9 Out of Ten largest generic pharmaceutical companies in the world are our customers
Note on its business:
Further, it is increasingly focused towards growing its integrated generics finished dosage forms business in which it has made significant investments over the last two financial years. It operates in four business lines: Generics – APIs, Generics – FDFs, Synthesis and Ingredients. Its Generics –API business comprises the development, manufacture and sale of APIs and advanced intermediates; Its Generics –FDF business comprises the development and manufacture of oral solid formulations; Its Synthesis business includes contract development and manufacturing services for global pharmaceutical companies; and its Ingredients business comprises the manufacture and sale of specialty ingredients for use in the nutraceutical and cosmeceutical sectors. The Company launched 59 products since its inception in 2005.
The Company currently operates three manufacturing facilities in Visakhapatnam, Andhra Pradesh. Two of its facilities manufacture APIs and ingredients, while its third facility is for the manufacturing of APIs and FDFs. As of June 30, 2016, its operational manufacturing facilities has 435 reactors and an aggregate reactor volume of 1,833.6 KL. It also has a kilo lab near Hyderabad, Telangana. The company is also in the process of setting up two additional manufacturing facilities, one for potent APIs (expected to commence operations by December 31, 2016) and the other for APIs, intermediates and ingredients (expected to commence construction during the financial year 2017). Post its planned expansion, its aggregate reactor volume will increase to 2,095.6 KL during the financial year 2017. Its manufacturing facilities have received one or more approvals from World Health Organization (“WHO”), US FDA, National Institute of Pharmacy Hungary (“NIP Hungary”), PMDA, KFDA or the Federal Institute for Drugs and Medical Devices (“BfArM”) of Germany. WHO and US FDA successfully conducted their last inspection at two of our facilities in Visakhapatnam in April 2015 and US FDA successfully conducted its last inspection at its kilo lab at Hyderabad in June 2016.
With an investment of Rs 2013.66 million, as of March 31, 2016, Laurus Labs is building a FDF manufacturing facility with a capacity of one billion tablets per year expandable 5 billion tablets for year after incurring additional investment.
Focused R &D :
The Company believes its “research-first” approach has been critical to its success and a differentiating factor from its competitors.
It believes that its systematic approach to selection of molecules, which involves evaluation of technical and commercial feasibility data, and customer feedback, is evident from its high
proportion of active DMFs, with the commercialization of 30 out of the 37 filed DMFs, as of June 30, 2016.As of June 30, 2016, the Company owned 32 patents and had 150 pending patent applications, in several countries, and have commercialized 59 products since its inception. The Company’s total expenditure for R&D activities, including for product development costs, was Rs.90.65 crores for the financial year 2016 compared to Rs 58.65
crores for the financial year 2015 and Rs 42.44 crores for the financial year 2014. As of June 30, 2016, the company employed 599 scientists at its R&D centers, which constituted 25.0% of total employee strength.
With a view to develop its pipeline for clinical phase manufacturing of new
chemical entities and contribute to the supply chain of its customers, Laurus established a presence in Greater Boston, Massachusetts, in 2015 with 12 scientists and four sales personnel who are focused on strengthening its synthesis business.
Its Customers :
Its key customers include Aspen Pharmacare Limited, Aurobindo Pharma Limited, Cipla Limited, Mylan Laboratories Limited, NATCO Pharma Limited (“NATCO”) and Strides Shasun Limited. For the financial year 2016, nine out of the 10 largest generic pharmaceutical companies in the world, by revenue, were our customers.
The Company has maintained long-standing relationships with multi-national pharmaceutical companies. Its top five customers have been with it for at least five years and these customers, in aggregate, contributed to approximately 67.8% of its total revenue and the cumulative revenue from such customers has grown year over year for the last
three financial years.
Its Oncology and other products are supplied to the US and European markets, During the financial year 2016, it sold its APIs in 32 countries.
The Company was incorporated in 2005, and it has delivered consistent growth over the last five financial years both in terms of financial and operational metrics.
For the financial years 2016, 2015 and 2014, its total revenues were Rs17,91.37crores, Rs. 13,60.66 crores and Rs. 1168.53 Crores, respectively.Its total revenues, on a standalone basis were Rs 452.31 crores for the financial year 2012,
Its total revenues grew at a CAGR of 41.0% between the financial years 2012 and 2016.
For the financial years 2016, 2015, and 2014, its restated profit for the year was Rs 1,32.65 crores , Rs 68.37 crores and Rs. 97.22 crores respectively.
Its restated profit, on a standalone basis, was Rs 21.58 crores for the financial year 2012,
Its restated profit, on a standalone basis grew at a CAGR of 60.6% between the financial years 2012 and 2016
Consolidated EPS Year ended on March 31, 2014 Rs.15.89
Consolidated EPS Year ended on March 31, 2015 Rs. 11.07
Consolidated EPS Year ended on March 31, 2016 Rs. 20.86
Book value As on March 31, 2016 Unconsolidated Rs. 137.53
& Consolidated Rs. 135.06( after adjustment of Bonus shares)
So upper Price Band/BV = 3.17/1
Compare it with Divis CMP Rs. 1133/BV Rs. 161= 7.03/1
Aurobindo Pharma CMP Rs. 730/BV Rs. 121= 6.03/1
Lead Managers : Kotak Mahindra Capital Company, Citigroup Global Markets India, Jefferies India and SBI Capital Markets.