Evaluating Indegene Ltd IPO opportunity; Should you invest?
Take a closer look at the exclusive details of Indegene Ltd’s IPO inside
About the Issue
Indegene Ltd is launching its initial public offering (IPO) for equity shares valued at Rs 2 each. The IPO price range is set between Rs 430 and Rs 452 per equity share, resulting in a total issue size of Rs 1,841.76 crore at the upper price band.
The IPO is scheduled to commence on May 06, 2024, and will conclude on May 08, 2024. The market lot size for the IPO is 33 shares, with the option to apply for multiples of this lot. Individual retail investors have the opportunity to apply for a maximum of 13 lots, equivalent to 429 shares or a total investment of Rs 1,93,908 assuming the upper price band.
| IPO Details |
| IPO Opening Date |
May 06, 2024 |
| IPO Closing Date |
May 08, 2024 |
| Issue Type |
Book Built Issue IPO |
| Face Value |
Rs 2 per equity share |
| IPO Price |
Rs 430 to Rs 452 per equity share |
| Min Order Quantity |
33 shares |
| Listing At |
BSE, NSE |
| Total Issue |
40,746,891 shares of FV Rs 2* |
| (Aggregating up to Rs 1,841.76 Cr)* |
| Fresh Issue |
16,814,159 shares of FV Rs 2* |
| (Aggregating up to Rs 760.00 Cr)* |
| Offer for Sale |
23,932,732 shares of FV Rs 2* |
| (Aggregating up to Rs 1,081.76 Cr)* |
| QIB Shares Offered |
50% of the Offer |
| Retail Shares Offered |
35% of the Offer |
| NII (HNI) Shares Offered |
15% of the Offer |
| *At Upper Price Band |
|
Objects of the Issue
The offer encompasses both the fresh issue and the offer for sale. It's important to note that the company will not accrue any proceeds from the offer for sale. The company plans to allocate the net proceeds raised from the fresh issue for the following purposes:
1. Repayment/prepayment of indebtedness of one of the material subsidiaries, ILSL Holdings, Inc
2. Funding the capital expenditure requirements of the company and one of the material subsidiaries, Indegene, Inc
3. General corporate purposes and inorganic growth
Promoter holding
The company states that it is professionally managed and does not have any identifiable promoter.
Company profile
The company offers digital-driven commercialization services tailored for the life sciences industry, encompassing biopharmaceuticals, emerging biotech firms, and medical device manufacturers. These services support clients in various aspects, such as drug development, clinical trials, regulatory submissions, pharmacovigilance, complaints management, and product sales and marketing. Its solutions empower life sciences companies to efficiently develop products, introduce them to the market, and boost sales throughout their life cycle in a more effective and modern way.
The Enterprise Commercial Solutions and Omnichannel Activation solutions are tailored to support the commercial operations of life sciences companies. On the other hand, the Enterprise Medical Solutions and Enterprise Clinical Solutions are designed to address their medical and research and development (R&D) functions.
As of December 31, 2023, the company boasted 65 active clients, serving them through operational hubs situated across North America, Europe, and Asia. Furthermore, it has solidified client partnerships with all of the top 20 biopharmaceutical companies worldwide by revenue for the financial year 2023.
Financials
| Rs (in crore) |
FY21 |
FY22 |
FY23 |
Dec-23 |
| Revenue |
997 |
1,690 |
2,364 |
1,970 |
| Profit before tax (PBT) |
231 |
226 |
363 |
325 |
| Net Profit |
149 |
163 |
266 |
242 |
The company has successfully demonstrated robust growth in both its revenue and net profit over the past few years. In FY23, both revenue and net profit witnessed strong year-on-year growth, with a 40 per cent rise in revenue and a 63 per cent surge in net profit compared to FY22. The 9MFY24 figures were equally impressive, suggesting robust growth for FY24 if the current pace is maintained.
Valuation and outlook
The issue is priced with a P/BV ratio of 7.55 times, calculated using its Net Asset Value (NAV) of Rs 59.86 as of December 31, 2023. When we calculate the PE ratio for the company by considering the annualized FY24 earnings relative to the fully diluted paid-up equity capital, the resulting PE ratio stands at 31. The company asserts that there are no other listed peers, either in India or globally, that operate similarly. Its unique business model affords it a near-monopoly in its industry.
The company's strengths lie in its profound domain expertise within the healthcare sector, robust digital capabilities, extensive portfolio of in-house developed technologies, enduring client relationships, and a well-established global delivery model.
Hence, we advise investors to contemplate subscribing to the offering with a long-term perspective.
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