Kotec Healthcare Limited has filed draft papers with SEBI for its Initial Public Offering (IPO). The company plans to raise ₹295 crore through this IPO. Of this amount, ₹226.25 crore will be raised through the issuance of new shares, and promoters will sell 60 lakh shares. The funds raised will be utilized for a new manufacturing project and corporate requirements.
Cotec Healthcare IPO: The company, a leading pharmaceutical CDMO in India, has filed its Draft Red Herring Prospectus (DRHP) with SEBI for its IPO. Through this IPO, the company aims to raise ₹295 crore, comprising ₹226.25 crore as a fresh issue and 60 lakh promoter shares. The proceeds will be used for a new manufacturing project, increasing production capacity, and for corporate purposes. Pantomath Capital Advisors is the lead manager for this public issue.
IPO Size
This IPO will consist of two components. The first component is a fresh issue, through which new equity shares worth ₹226.25 crore will be issued. The second component is an Offer for Sale (OFS), where promoters Harsh Tiwari and Vandana Tiwari will sell 60 lakh shares. Both promoters will sell 30 lakh shares each. The funds raised from this IPO will primarily be used for a new manufacturing project and to enhance production capacity. Additionally, a portion of the funds will also be utilized for general corporate purposes. Pantomath Capital Advisors will act as the lead manager for this public issue.
Introduction to Kotec Healthcare
Kotec Healthcare is recognized as a prominent Contract Development and Manufacturing Organization (CDMO) in India's pharmaceutical industry. The company offers services such as formulation development, loan licensing, commercial manufacturing of off-patent products, and the creation of complex delivery forms like sustained and modified-release formulations. The company serves both institutional and private sector clients.
Pharma Market Scenario
The Indian pharmaceutical market is experiencing rapid growth. According to an F&S report, the Indian pharma market was valued at $16.6 billion in 2019. It is projected to reach $38.3 billion by 2029. The primary drivers for this market expansion include generic drugs, over-the-counter products, bulk drugs, and a robust contract research and manufacturing sector. India ranks third globally in terms of production in this sector.
New Manufacturing Project and Production Expansion
This IPO is highly significant for Kotec Healthcare as the funds raised will enable the company to commence a new manufacturing project. The objective of this project is to augment existing production capacity and initiate the manufacturing of new products. Experts believe this expansion will lead to an increase in the company's product range and service offerings.
Opportunity for Investors
This IPO presents an attractive opportunity for investors. Kotec Healthcare's focus is on CDMO services, a sector experiencing rapid growth within the Indian pharmaceutical market. The expansion of new products and manufacturing capacity is likely to boost the company's growth rate. Investors can participate in the pharmaceutical sector through this IPO and potentially earn future returns.
The funds raised from the company's fresh issue will be utilized to enhance production capacity, purchase machinery for the new project, and for research and development activities. The OFS will allow promoters to reallocate their investments. Consequently, the company's capital structure will be strengthened, and financial stability will improve.
Contribution to the Indian Pharma Industry
CDMO companies like Kotec Healthcare are the backbone of the Indian pharmaceutical industry. These companies not only contribute to drug production within the country but also establish India as a reliable supplier internationally. The company's expansion plans can be realized through this IPO, which will also contribute to the nation's pharmaceutical export capabilities.
