IPO NOTE

AKUMS DRUGS AND PHARMACEUTICALS LTD.

Akums Drugs and Pharmaceuticals Limited is a pharmaceutical
Rating: contract development and manufacturing organization (“CDMO”)
offering a comprehensive range of pharmaceutical products and
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services in India and overseas. Its core business is focused on
providing end-to-end product development and manufacturing
solutions to its clients. In addition, it is also engaged in the
ISSUE OFFER
manufacturing and sale of branded pharmaceutical formulations and
Issue Opens on JULY 30, 2024
active pharmaceutical ingredients.
Issue Close on AUG 01, 2024
Total IPO size (cr) ₹1,856.74
Fresh issue (cr) ₹680.00
OBJECTS OF THE ISSUE
Offer For Sale (cr) ₹1,176.74
Payment of indebtedness of the company and its Subsidiaries.
Price Band (INR) 649-679 Funding incremental working capital requirements.
Market Lot 22 Pursuing inorganic growth initiatives through acquisitions
Face Value (INR) ₹2
Retail Allocation 10% OUTLOOK & VALUATION
Listing At NSE, BSE
Akums Drugs and Pharmaceuticals is a leading Contract Development
and Manufacturing Organization (CDMO) in India, boasting a diverse
ISSUE BREAK-UP (%)
client base, robust R&D capabilities, and a strategic foothold across
QIB Portion 75% the pharmaceutical value chain.

NII Portion 15% While the company has demonstrated top-line growth, its profitability
Retail Portion 10% has been impacted by non-operational factors such as fair value
adjustments. However, the company's long-term prospects are
supported by its established market position and growth potential.
SHAREHOLDING (No. of Shares)
Key risks include geographic concentration, potential manufacturing
Pre Issue Post Issue or quality control issues, and regulatory scrutiny. These factors
147,356,280 157,371,007 require careful consideration.

Excluding adjusted put call liabilities, the IPO is valued at a reasonable

INDICATIVE TIMETABLE P/E of approximately 28x. Given the company's market leadership,
Finalisation of Basis of Allotment 02-08-2024 growth prospects, and valuation, we recommend a cautious approach
Refunds/Unblocking ASBA Fund 05-08-2024 to the IPO, with investors carefully assessing the aforementioned
Credit of equity shares to DP A/c 05-08-2024 risks before making an investment decision.
Trading commences 06-08-2024

For additional information & risk factors please refer to the Red Herring Prospectus
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KEY MANAGERIAL PERSONNEL

01 02
Sanjeev Jain Sandeep Jain
Managing Director of the Company. He has Managing Director of the Company. He
been associated with the Company as a co- has been associated with the Company as a
founder, promoter and a director since April co-founder, promoter and a director since
19, 2004. He has over 38 years of April 19, 2004. He has over 36 years of
experience in Indian pharma industry and experience in establishing and running
managing end to end aspects of CDMO large scale pharma manufacturing facilities.
business. Prior to the incorporation of the Presently, he is the Chairman of
Company, he was associated with M/s Association of Devbhumi Pharma
Welcure Pharmaceuticals. Industries and Past Chairman of
Confederation of Indian Industry’s state
council, Uttarakhand

03 04
Sumeet Sood Dharamvir Malik
Chief Financial Officer of the Company. He Company Secretary and Compliance Officer of the
holds a bachelor’s degree in commerce from Company. He is a fellow member of the Institute of
the University of Delhi. He is a Chartered Company Secretaries of India. He holds a bachelor’s
Accountant and is registered with the degree in law from Dr. Bhimrao Ambedkar
Institute of Chartered Accountants of India. University, Agra. He was previously associated
He joined the Company with effect from with Suruchi Foods Private Limited. He joined the
February 14, 2022. He is responsible for Company with effect from November 6, 2013. He
heading all accounts, finance, and banking is responsible for handling all company secretarial
teams in the Company. affairs and compliance related to corporate
governance of the Company.

For additional information & risk factors please refer to the Red Herring Prospectus
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COMPANY PROFILE

Akums Drugs and Pharmaceuticals Limited is the largest India-focused CDMO in revenue, production
capacity, and clients served during the Financial Year 2023.
During the Financial Year 2024, it had a market share of 30.2% of the Indian domestic CDMO market
by value.
As a CDMO, it produces an extensive range of dosage forms including tablets, capsules, liquid orals,
vials, ampoules, blow-filled seals, topical preparations, eye drops, dry powder injections, and gummies,
among others.
For its CDMO business, it operates 10 manufacturing units, with a cumulative formulations
manufacturing capacity of 49.23 billion units annually, as of March 31, 2024. Further, it expects its new
injectable facility to be operational in the Financial Year 2025.
As of March 31, 2024, key clients for its CDMO business include Alembic Pharmaceuticals, Alkem
Laboratories, Blue Cross Laboratories, Cipla, Dabur India, Dr. Reddy’s Laboratories, Hetero Healthcare,
Ipca Laboratories, Mankind Pharma, MedPlus Health Services.

COMPETITIVE STRENGTHS

Largest CDMO serving the Indian pharmaceutical industry.

Diverse client base with longstanding CDMO relationships.
Large and rapidly growing R&D capabilities across its product portfolio.
Strategic presence across the pharmaceutical value chain.
Experienced and entrepreneurial management team with a proven track record and marquee healthcare-
focused private equity investor.

KEY STRATEGIES

Leverage its leadership position to continue to increase its market share and consolidate its position
in the CDMO market.
Sustaining R&D for product development across therapies and dosage forms.
Grow its domestic formulations business.
Expanding its global presence through strategic initiatives.
Scale its API business.

KEY CONCERNS

The geographic concentration of its manufacturing units and R&D centers heightens its exposure to
adverse developments and economic shifts within this region.
Any slowdown or shutdown in its manufacturing and research and development operations could
have an adverse effect on its business.
Any manufacturing or quality control concerns or its inability to deliver products on a timely basis, or
at all, could result in the cancellation of purchase orders.
Its manufacturing units are subject to periodic inspections and audits by regulatory authorities and
clients.
The Company has incurred losses in the past and may incur losses in the future.
It has received various notices from regulatory authorities in India alleging instances of non-
compliance.

For additional information & risk factors please refer to the Red Herring Prospectus
 COMPARISON WITH LISTED INDUSTRY PEERS

Name of the Company EPS (Basic) NAV P/E TOTAL INCOME (In ML) RoNW (%)
Akums Drugs and Pharmaceuticals (0.28) 49.59 - 41,781.82 (0.57)%
Peer Group
Divi's Laboratories 60.27 511.21 74.99 78,450.00 11.79%
Suven Pharma 11.80 80.56 69.54 10,513.54 14.64%
Gland Pharma 46.90 529.65 42.45 56,647.22 8.85%
Torrent Pharma 48.94 202.57 60.20 107,280.00 24.15%
Alkem Laboratories 150.19 862.46 34.18 126,675.80 17.41%
Eris Lifesciences 28.82 190.12 34.95 20,091.43 15.16%
JB Chemicals 35.66 188.37 51.38 34,841.80 18.90%
Mankind Pharma 47.75 233.73 44.65 103,347.74 20.43%
Innova Captab 18.66 145.20 29.91 10,813.05 11.35%

FINANCIALS (RESTATED CONSOLIDATED)

PARTICULARS (RS. IN MILLION) FY 2024 FY 2023 FY 2022

Equity Share Capital 286.13 286.13 143.07
Other equity 6,808.85 6,885.76 6,076.69
Net Worth 7,204.86 7,233.74 6,251.71
Total Borrowings 782.97 1,154.96 133.33
Revenue 41,781.82 36,548.20 36,718.93
EBITDA 1,570.10 3,840.55 (690.89)
Profit/loss of the year (452.78) 1,502.97 (1,931.97)
Net Profit/loss of the Year 7.90 978.17 (2,508.74)

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of this document must read carefully the Red Herring Prospectus (“RHP”) issued to know the details of IPO and various risks and uncertainties associated with the investment in the IPO of
the Company. All recipients of this document must before acting on the given information/details, make their own investigation and apply independent judgment based on their specific
investment objectives and financial position. They can also seek appropriate professional advice from their own legal and tax consultants, advisors, etc. to understand the risks and
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that past performances if any, are not indicative of future results. The actual returns on investment may be materially different than the past. Investments in Securities market products and
instruments including in the IPO of the Company are highly risky and they are generally not an appropriate avenue for someone with limited resources/ limited investment and low risk
tolerance. Such Investments are subject to market risks including, without limitation, price, volatility and liquidity and capital risks. Therefore, the users of this document must carefully
consider all the information given in the RHP including the risks factors before making any investment in the Equity Shares of the Company.
Swastika Investmart Ltd or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the
research report. Accordingly, neither Swastika Investmart Ltd nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our
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CORPORATE & ADMINISTRATIVE OFFICE - 48, Jaora Compound, M.Y.H. Road, Indore - 452 001 | Phone 0731 - 6644000
Compliance Officer: Ms. Sheetal Duraphe Email: [email protected]: (0731) 6644 241
Swastika Investmart Limited, SEBI Reg. No. : NSE/BSE/MSEI: INZ000192732 Merchant Banking: INM000012102 Investment Adviser: INA000009843 MCX/NCDEX: INZ000072532
CDSL/NSDL: IN-DP-115-2015 RBI Reg. No.: B-03-00174 IRDA Reg. No.: 713.

For additional information & risk factors please refer to the Red Herring Prospectus