Akums Drugs and Pharmaceuticals IPO Basis of Allotment

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THIS ISA PUBIC ANNOUNCEMENT FOR ^FORMATION PURPOSES ONLY AND 6 NOT A PROSPECTUS ANNOUNCEMENT AND DOES NOT CONSTITUTEAN INVITATION OR OFFER TO ACQUIRE, PURCHASE OR SUBSCRIBE TO SECURITIES NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR WDIRECHY OUTSIDE INDIA NITIAL PUBLIC OFFER OF EQUITY SHARES (AS DEFINED BELOW) ON THE MAIN BCWRD OF THE STOCK EXCHANGES (DEFINED BLOW) IN COMPLWNCE WITH CHAPTER II OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITALAND DISCLOSURE REQUIREMENTS) REGULATIONS. 2018. AS AMENDED

INITIAL PUBLIC OFFER OF 27,368,151* EQUITY SHARES OF FACE VALUE OF Rs. 2 EACH ("EQUITY SHARES") OF AKUMS DRUGS AND PHARMACEUTICALS LIMITED ("COMPANY" OR "ISSUER") FOR CASH AT A PRICE OF Rs. 679* PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF Rs. 677 PER EQUITY SHARE) ("OFFER PRICE") AGGREGATING TO Rs.18.56737MILLION** COMPRISING A FRESH ISSUE OF 10,037,716* EQUITY SHARES AGGREGATING TO Rs. 6,800.00** MILLION BY OUR COMPANY ("FRESH ISSUE") AND AN OFFER FOR SALE OF 17,330,435 EQUITY SHARES AGGREGATING TO Rs. 11,76737 MILLION* ("OFFERED SHARES") BY THE SELUNG SHAREHOLDERS, COMPRISING OF 1,512,000 EQUITY SHARES AGGREGATING TO Rs. 1,026.65 MILLION* BY SANJEEV JAIN, 1,512,000 EQUITY SHARES AGGREGATING TO Rs. 1,026.65 MILLION* BY SANDEEP JAIN (TOGETHER THE "PROMOTER SELUNG SHAREHOLDERS") AND 14,306,435 EQUITY SHARES AGGREGATING TO Rs. 9,714.07 MILUON* BY RUBY QC INVESTMENT HOLDINGS PTE. LTD. (THE "INVESTOR SELLING SHAREHOLDER") (THE PROMOTER SELLING SHAREHOLDERS AND THE INVESTOR SELUNG SHAREHOLDER, COLLECTIVELY REFERRED TO AS THE "SELUNG SHAREHOLDERS") ("OFFER FOR SALE", TOGETHER WITH THE FRESH ISSUE, THE "OFFER").

THIS OFFER INCLUDES ARESERVATION OF 243,902* EQUITY SHARES AGGREGATING TORs. 150.00 MILLION** FOR SUBSCRPTION BY ELIGIBLE EMPLOYEES (THE "EMPLOYEE RESERVATION PORTION"). THE OFFER LESS THE EMPLOYEE RESERVATION PORTION IS HEREINAFTER REFERRED TO AS THE "NET OFFER". THE OFFER AND THE NET OFFER CONSTITUTED 17.39% AND 17.23%OF OUR POST-OFFER PAD-UP EQUITY SHARE CAPITAL, RESPECTIVELY.

THE FACE VALUE OF EQUITY SHARES IS Rs. 2 EACH. THE OFFER PRICE IS 339.50 TMES THE FACE VALUE OF THE EQUITY SHARES. THE PRICE BAND AND THE MINMUM BID LOT WAS DECIDED BY OUR COMPANY IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS AND WAS ADVERTISED IN ALL EDITIONS OF FINANCIAL EXPRESS, AN ENGUSH NATIONAL DAILY NEWSPAPER AND ALL EDITIONS OF JANSATTA, A HINDI NATIONAL DAILY NEWSPAPER (HINDI ALSO BEING THE REGIONAL LANGUAGE OF DELHI, WHERE OUR REGISTERED OFFICE IS LOCATED), EACH WITH WIDE CIRCULATION, AND WAS MADE AVAILABLE TO BSE AND NSE (TOGETHER WITH BSE, THE "STOCK EXCHANGES") FOR THE PURPOSE OF UPLOADING ON THEIR RESPECTIVE WEBSITES.

*Subject to finalisation of Basis of Allotment | *As certified byTAMS&C0 LLP, Chartered Accountants by way of their certificate dated August 1, 2024.

1. Concentration of manufacturing units: Our manufacturing units and research and development centres are concentrated in Haridwar, Uttarakhand and we are exposed to risks originating from economic, regulatory, political and other changes in this region, including natural disasters, which could have an adverse effect on our business operations.

2. Third party dependence for raw materials: We rely on domestic and international third-party suppliers for the supply of raw materials and any delay, interruption or reduction in such supply could have an adverse effect on our business operations.

3. Fluctuation in financial ratios: Our EBITDA margin, profit after tax margin, return on equity and return on capital employed have fluctuated significantly during the Financial Years 2024, 2023 and 2022.

4. Negative Cash Flows: We have had negative cash flows from investing activities during the Financial Year 2024. Negative cash flows over extended periods, or significant negative cash flows in the short term, could affect our ability to operate our business and implement our growth plans.

5. Regulatory Risk: We have received various notices from regulatory authorities in India alleging instances of non-compliances, including with respect to certain violations of Companies Act, Employees' Provident Fund and Miscellaneous Provisions Act, 1952, Drugs and Cosmetics Act, 1940 and other applicable law by our Company and Subsidiaries in the past. Failure to defend these proceedings successfully could have an adverse effect on our business operations and resultantly, our financial condition.

6. Customer Concentration: Our business is dependent on the sale of products to a limited number of clients for a significant portion of our revenues. The loss of one or more such clients or the deterioration of their financial condition or prospects could adversely affect our business operations.

The revenue contribution of the ten largest clients of our CDMO business for the Financial Years 2024,2023 and 2022 is Rs.12,841.14 million, Rs.10,597.55million and Rs.10,982.66 million constituting 39.31%, 38.92% and 41.27% of revenue from operations from CDMO business respectively.

7. Manage inventory: Our inability to accurately forecast demand for our products and manage our inventory may have an adverse effect on our business, results of operations, financial condition and cash flows:

8. Our Company had issued Equity Shares to more than 49 investors in the past, which may have been in non-compliance with the Companies Act, 1956.

9. Significant capital expenditure requirement: Our business requires significant capital expenditure. If we are unable to have access to capital, it could have an adverse effect on our business operations. The capital expenditure incurred by us for our CDMO business in Fiscals 2024,2023 and 2022 is Rs.2,994.12 million, Rs.2,879.10 million and Rs.1,970.12 million respectively.

10. Export Risk: We export our products to regulated and semi-regulated markets and a failure to comply with the regulatory and other requirements of such markets could have an adverse effect on our business operations.

11. Operation Risk: Any slowdown or shutdown in our manufacturing and research and development operations could have an adverse effect on our business operations.

12. Missing corporate records: Certain of our corporate records, filings and instruments of transfer are not traceable. We cannot assure you that no legal proceedings or regulatory actions will be initiated against us in the future in relation to any such discrepancies.

13. Incurred losses in past: We have incurred losses in the past and may incur losses in the future.

14. Delays in payment of statutory dues: There have been certain instances of delays in payment of statutory dues by our Company and our Subsidiary in the past. Any failure or delay in payment of such statutory dues may expose us to statutory and regulatory action, as well as significant penalties, and could have an adverse effect on our business operations and resultantly, our financial condition.

15. Weighted average cost of acquisition of all shares transacted in the last one year, eighteen months and three years preceding the date of the RHP.

As certified by TAMS & CO LLP. Chartered Accountants pursuant to their certificate dated July 24. 2024. ^A To be updated in the Prospectus following finalisation of Cap Price, as per the finalised Price Band.

'Excluding gift and bonus transactions.

16. The 4 BRLMs associated with the Issue have handled 69 public issues in the past 3 years, out of which 15 issues have closed below the offer price on the listing date.

*Issues handled where there were no common BRLMs.

Potential Bidders may note the following:

On May 16, 2024, the individual Promoters of our Company, namely, Sanjeev Jain and Sandeep Jain ("Individual Promoters"), transferred 32,100,000 Equity Shares each to the Akums Master Trust ("Transfer"), which was formed pursuant to a trust deed dated February 7, 2024, wherein the Individual Promoters are also the trustees of the Akums Master Trust. The details of the Transfer are provided below:

The Offer was made through the Book Building Process, in terms of Rule 19(2)(b) of the SCRR read with Regulation 31 of the SEBIICDR Regulations and in compliance with Regulation 6(2) of the SEBI ICDR Regulations, wherein not less than 75% of the Net Offer was available for allocation on a proportionate basis to Qualified Institutional Buyers ("QIBs") ("QIB Portion"), of which one-third was reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price ("Anchor Investor Portion"), in accordance with the SEBI ICDR Regulations. Further, 5% of the Net QIB Portion was made available for allocation on a proportionate basis to Mutual Funds only and the remainder of the Net QIB Portion was made available for allocation on a proportionate basis to all QIBs (other than Anchor Investors) including Mutual Funds, subject to valid Bids having been received at or above the Offer Price. Further, not more than 15% of the Net Offer was available for allocation to Non-lnstitutional Bidders out of which (a) one third of such portion was reserved for applicants with application size of more than T200,000and up to ^1,000,000; and (b) two third of such portion was reserved for applicants with application size of more than ^1,000,000 and not more than 10% of the Net Offer was available for allocation to Retail Individual Bidders, in accordance with the SEBI ICDR Regulations, subject to valid Bids having been received from them at or above the Offer Price. Further, Equity Shares will be allocated on a proportionate basis to Eligible Employees applying under the Employee Reservation Portion, subject to valid Bids received from them at or above the Offer Price. All Bidders (except Anchor Investors) were required to mandatorily utilise the Application Supported by Blocked Amount ("ASBA") process by providing details of their respective ASBA accounts and UPI ID (in case of UPI Bidders) (as defined hereinafter), in which case the corresponding Bid Amounts was blocked by the Self Certified Syndicate Banks ("SCSBs") or under the UPI Mechanism, as applicable to participate in the Offer. Anchor Investors were not permitted to participate in the Anchor Investor Portion of the Offer through the ASBA process. For details, see "Offer Procedure" on page 472 of the Prospectus.

The Bidding for Anchor Investors opened and closed on Monday, July 29, 2024. Our Company received 50 applications from 34 Anchor Investors (including 9 domestic mutual funds through 24 Mutual Fund schemes) for 1,24,56,862 Equity Shares. The Anchor Investor Offer Price was finalized at ^679 per Equity Share. A total of 1,22,05,912 Equity Shares were allocated under the Anchor Investor Portion aggregating to Rs.8,28,78,14,248.00.

The Offer received 23,37,372 applications for 96,52,33,918 Equity Shares (prior to rejections) resulting in 63.66 times subscription. The details of the applications received in the Offer from various categories are as under (before rejections):

Final Demand

A summary of the final demand as per NSE and BSE as on the Bid/Offer Closing Date as at different Bid prices is as under:

The Basis of Allotment was finalized in consultation with the Designated Stock Exchange, being the NSE on August 02,2024.

A. Allotment to Retail Individual Investors (after rejections) (including ASBA Applications)

The Basis of Allotment to the Retail Individual I nvestors, who have bid at the Cut-Off Price or at the Offer Price of 679 per Equity Share, was finalized in consultation with the NSE. This category has been subscribed to the extent of 21.02 times. The total number of Equity Shares Allotted in the Retail Portion is 27,12,431 Equity Shares including spillover of 7 Equity Shares from Employee category to 1,23,292 successful Retail Individual Investors. The category-wise details of the Basis of Allotment are as under:

B. Allotment to Non-lnstitutional Investors (more than Rs.200,000 and up toRs. 1.000.000) (after rejections) (including ASBA Applications)

The Basis of Allotment to the Non-lnstitutional Investors (more than Rs.200,000 and up to Rs.1,000,000), who have bid at the Offer Price of Rs.679 per Equity Share or above, was finalized in consultation with the NSE. This category has been subscribed to the extent of 31.84 times. The total number of Equity Shares Allotted in this category is 13,56,215 Equity Shares including spillover of 3 Equity Shares from Employee category to 4,403 successful Non-lnstitutional Investors (more than Rs. 200,000 and up to Rs. 1,000,000). The category-wise details of the Basis of Allotment are as under (Sample):

C. Allotment to Non-lnstitutional Investors (more than Rs.1,000,000) (after rejections) (including AS BA Applications)

The Basis of Allotment to the Non-lnstitutional Investors (more than Rs.1,000,000), who have bid at the Offer Price of ^679 per Equity Share or above, was finalized in

consultation with the NSE. This category has been subscribed to the extent of 47.30 times. The total number of Equity Shares Allotted in this category is 27,12,432 Equity Shares including spillover of 7 Equity Shares from Employee category to 8,806 successful Non-lnstitutional Investors (more than Rs.1,000,000). The category- wise details of the Basis of Allotment are as under (Sample):

D. Allotment to Eligible Employees (After Rejections)

The Basis of Allotment to the Eligible Employees, who have bid at the Offer Price of ^679 per Equity Share# or above, was finalized in consultation with NSE. This category has been subscribed to the extent of ^0.99 times. 68 equity shares were spilled over to the Net issue portion. The total number of Equity Shares allotted in this category is ^2,43,826 Equity Shares to ^1,537 successful applicants. The category-wise details of the Basis of Allotment are as under:

E. Allotment to QIBs (after rejections)

Allotment to QIBs, who Bid at the Offer Price of ^679 per Equity Share or above, has been done on a proportionate basis in consultation with the NSE. This category has been subscribed to the extent of 89.94 times of the Net QIB Portion. As per the SEBIICDR Regulations, Mutual Funds were allotted 5% of the Equity Shares of the Net QIB Portion available, i.e., 4,06,867 Equity Shares and other QIBs and unsatisfied demand of Mutual Funds were allotted the remaining available Equity Shares i.e., 77,30,460 Equity Shares on a proportionate basis. The total number of Equity Shares allotted in the Net QIB Portion is 81,37,327 Equity Shares, which were allotted to 165 successful Ql B Bidders. This includes 51 Equity shares spilled over from Employee Category. The category-wise details of the Basis of Allotment are as under:

F. Allotment to Anchor Investors

Our Company in consultation with the BRLMs, have allocated 1,22,05,912 Equity Shares to 34 Anchor Investors (through 50 Anchor Investor Application Forms) (including 9 domestic Mutual Funds through 24 schemes) at the Anchor Investor Offer Price of Rs.679 per Equity Share in accordance with the SEBI ICDR Regulations. This represents 60% of the QIB Portion.

The Board at its meeting held on August 02, 20204 has taken on record the Basis of Allotment of Equity Shares approved by the Designated Stock Exchange, being NSE and has allotted the Equity Shares to various successful applicants. The Allotment Advice-cum-Unblocking Intimations and/ or notices have been dispatched to the addresses of the investors as registered with the depositories. Further, the instructions to the Self Certified Syndicate Banks for unblocking of funds, transfers to the Public Offer Account have been issued on August 02, 2024 and payment to non-Syndicate brokers have been issued on August 05, 2024. In case the same is not received within ten days, investors may contact the Registrar to the Offer at the address given below. The Equity Shares allotted to the successful Allottees have been uploaded on August 05, 2024 for credit into the respective beneficiary accounts subject to validation of the account details with the depositories concerned. Our Company has filed the listing application with the NSE and BSE on August 05,2024. Our Company has received the listing and trading approval from NSE and BSE and the trading will commence on August 06,2024.

Note: All capitalised terms used and not specifically defined herein shall have the same meaning as ascribed to them in the Prospectus.

INVESTORS PLEASE NOTE

The details of the Allotment made will be hosted on the website of the Registrar to the Offer, Link Intime India Private Limited at www.linkintime.co.in All future correspondence in this regard may kindly be addressed to the Registrar to the Offer quoting full name of the fi rst/ sole Bidder, Bid cum Application Form number, Bidder DP ID, Client ID, PAN, date of submission of Bid cum Application Form, address of the Bidder, number of Equity Shares applied for, the name and address of the Designated Intermediary where the Bid cum Application Form was submitted by the Bidder and a copy of the Acknowledgment Slip received from the Designated Interme- diary at the address given below:

THE LEVEL OF SUBSCRIPTION SHOULD NOT BE TAKEN TO BE INDICATIVE OF EITHER THE MARKET PRICE OF THE EQUITY SHARES ON LISTING OR THE BUSINESS PROSPECTUS OFAKUMS DRUGS AND PHARMACEUTICALS LIMITED.

AKUMS DRUGS AND PHARMACEUTICALS LIMITED has filed a Prospectus dated Thursday, August 1,2024 ('Prospectus') with the Registrar of Companies( RoC'). The Prospectus is available on the website of the Company at www.akums.in, SEBI at www.sebi.gov.in, the website of the National Stock Exchange of India Limited at www.nseindia.com and the website of the BSE Limited at www.bseindia.com and the respective website of the book running lead managers to the Offer, namely, ICICI Securities Limited, Axis Capital Limited, Citigroup Global Markets India Private Limited and Ambit Private Limited, at www.icicisecurities.com, www.axiscapital.co.in, www.online.citibank.co.in/rhtm/citigroupglobalscreen1.htm and www.ambit.co. Investors should note that investment in equity shares involves a high degree of risk. For details, refer to the Prospectus filed with the RoC, including the section titled Risk Factors' on page 28 of the Prospectus.

This announcement does not constitute an invitation or offer of securities for sale in any jurisdiction. The Equity Shares offered in the Offer have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended ( U.S. Securities Act') and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable state securities laws. Accordingly, the Equity Shares are being offered and sold (a) outside the United States in offshore transactions as defined in and in compliance with Regulation S and the applicable laws of the jurisdictions where those offers and sales are made, and (b) in the United States only to persons reasonably believed to be qualified institutional buyers' (as defined in Rule 144A under the U.S. Securities Act) pursuant to Section 4(a) of the U.S. Securities Act. There will be no public offering of securities in the United States.