Mumbai-based active pharmaceuticals ingredients manufacturer Supriya Lifescience will launch its Rs 700 crore initial public offering (IPO) on December 16, Thursday.
The offering will consist of the issuance of new equity shares worth Rs 200 crore, as well as the offloading of 1.82 crore equity shares worth Rs 500 crore by the founder Satish Waman Wagh.
The net proceeds from the fresh issue will be used for capital expenditures, debt repayment, and other general corporate purposes.
Supriya Lifescience has seen tremendous interest in the grey market, where it traded at a huge 91 percent premium over its upper issue price range, ahead of the public offering.
The company has consistently been the largest exporter of chlorpheniramine maleate and ketamine hydrochloride from India, contributing to 45-50 percent and 60-65 percent, respectively, of the API exports from India, between FY17 and FY21.
Here are the company's strengths, weaknesses, threats and opportunities:
Strengths:
Company with a significant scale with the leadership position across key & niche products
It has a backward integrated business model
Company has advanced manufacturing and research and development capabilities
The company has consistent strong financial performance due to de-risked business model
It has an experienced senior management team and qualified operational personnelWeakness
If the company does not successfully develop or commercialise new products in a timely manner, or if the products that the company commercialise do not perform as expected, our business, results of operations and financial condition may be adversely affected.
The company's business is subject to extensive regulation. If the company fail to comply with regulations prescribed by governments and regulatory agencies or if the company fail to obtain, maintain or renew our statutory and regulatory licenses, permits and approvals required to operate our business, our business, results of operations and financial condition could be adversely affected.
Any manufacturing or quality control problems may damage the company's reputation and expose them to litigation or other liabilities, which could adversely affect our results of operations and financial condition.
Non-compliance with and changes in, safety, health, environmental and labour laws and other applicable regulations, may adversely affect the company's business, results of operations, financial condition and cash flows.
Any delay in production at, disruption or shutdown of the company's manufacturing facility or failure to achieve optimal capacity utilisation at such facility could adversely affect our business, results of operations and financial condition.Threat
The company derives a significant portion of their revenue from the sale of certain products and any reduction in demand for these products could have an adverse effect on our business, results of operations and financial condition.
The company derives a significant portion of their revenue from a few customers and the loss of one or more such customers, the deterioration of their financial condition or prospects, or a reduction in their demand for our products could adversely affect our business, results of operations and financial condition.
If the company is unable to raise additional capital, business, results of operations and financial condition could be adversely affected.
If the company is unable to patent new processes and protect proprietary information or other intellectual property, the business may be adversely affected.
The management team and other key personnel are critical to the continued success and the loss of any such personnel could adversely affect the business.Opportunities
Emerging markets represent an exceptional opportunity for the pharmaceutical industry on account of the expected rise in healthcare spending from current low levels and increase in per capita income to support this rise in expenditure.
The company believes that its leverage capacity will improve the ability to raise further resources in the future to fund its potential business development opportunities and plans to grow and expand its business.
The company intends to improve their R&D capabilities, with a focus on capturing more high-value first-to-market opportunities in key international markets, as well as leveraging our broad product basket to enhance our market position globally.
The company intends to increase our R&D capabilities and expertise in niche areas with high entry barriers such as complex chemistry, complex technology and patented processes, which offer significant market opportunities.
The company will continue to focus on developing and filing more DMFs in the area of niche and differentiated products which will provide better growth opportunities and help them in developing the business.
