Gland Pharma IPO - Subscribe Says Research Analysts

Published on Monday, November 9, 2020 by Chittorgarh.com Team

Gland Pharma, a Hyderabad based leading pharmaceutical company in India, is coming up with an Initial Public Offer of Rs 6,479.55 Cr. The public issue opens from Nov 9, 2020, to Nov 11, 2020. Below are the reviews by top research analysts and brokerage houses.

ICICI Direct (Subscribe)

It is a niche player in sterile injectables, oncology, and ophthalmic solutions with a focus on first-to-file, 505(b)(2) filings, and NCE- 1s.
Along with its partners, Gland has 267 ANDA filings (101 owned) in the US as of Q1FY21, of which 215 were approved.
The company has seven manufacturing facilities in India, comprising four formulations facilities with 22 production lines and three API facilities.
In 2017, Shanghai-based Fosun Pharma had acquired a 74% stake in the company for US$1.09 billion.

Capital Market (May Subscribe)

Solid track record in a niche segment, with relatively high entry barriers, and unique business model.
At the higher price band of Rs 1500, the offer is made at around 31.7 times its FY 2020 EPS of Rs 47.4 on a post-issue equity share capital of Rs 16.33 crore of the face value of Rs 1 each. There is no comparable listed player with a mirror business.
Low-risk low return or Moderate risk, moderate/high return.

Axis Bank (None)

Incorporated on March 20, 1978, It is one of the fastest-growing generic injectables-focused companies by revenue in the United States from 2014 to 2019.
Sells its products primarily under a B2B model in over 60 countries.
Gland Pharma along with its partners had 267 ANDA filings in the United States, of which 215 were approved and 52 were pending approval.

GEPL Capital (Subscribe)

The offer is priced at a P/E of ~18.52x on annualized EPS of the quarter ended June 2020.
The company has a focus on complex injectables which has high entry barriers and strategic partnerships to penetrate new markets like China which can prove to be a lucrative opportunity for the company.
With a strong product pipeline and more complex products under development, focus on B2B expansion and licensing, and opportunities to enter more therapy areas, the offer looks attractive.
We recommend a SUBSCRIBE to the offer.

Kotak Securities (None)

Extensive and vertically integrated injectables manufacturing capabilities.
Diversified B2B-led model across markets, complemented by a targeted B2C model in India.
Extensive portfolio of complex products supported by internal R&D and regulatory capabilities.
Track record of growth and profitability from a diversified revenue base with healthy cash flows.
Professional and experienced management team with significant expertise in the pharmaceutical industry.

K R Choksey (Subscribe)

Fastest growing generic injectable company in the US
The company doesn't have any directly listed peers in the domestic market.
The company has a unique business model of B2B nature, aided by vertical integration & R&D expertise.
The company has expansion plans in terms of geographical & capacity expansion & is open to inorganic opportunities as well.
It also has a strong balance sheet with negligible debt & strong cashflows.
At the upper band of the issue price, Gland Pharma to have a PE multiple of 25.7x on LTM earnings, which is at a steep discount to its listed global peers like Lonza (53.3x), Catalant (64.6x), Recipharm (51.5x).

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