Review By Chittorgarh.com Team on May 11, 2008
- BID/ISSUE Opens On: MONDAY, MAY 12, 2008
- BID/ISSUE Closes On: THURSDAY, MAY 15, 2008
- Price Band - Upper Band: Rs 210
- Price Band - Lower Band: Rs 200
- Face Value: Rs 10 per equity share
- Issue Size: 3,820,000 Equity Shares
- Issue Size in at Upper Band: Rs 80.22 Cr.
- Issue Size in at lower band: Rs 76.40 Cr.
- Issue as % of post issue share capital: 27.14
- Equity Shares outstanding prior to the Issue: 8,256,000 Equity Shares
- Equity Shares outstanding post the issue: 12,076,000 Equity Shares
- Listing on: BSE
- Market Capitalization at upper band: Rs 253.60 Cr.
Issue objects
- Setting up a new plant for manufacturing of drug intermediates including Active Pharmaceutical Ingredients (APIs) at Vishakhapatnam.
To expand its activities by way of forward integration, Anu proposes to set up a new plant for the manufacture of intermediates including APIs.
Fund Requirement (Rs Cr.) - 55.09
- Setting up of pilot plant for carrying out Contract Research and Manufacturing (CRAM) at Vishakhapatnam.
Anu's has identified contract manufacturing as one of the ways to maintain growth and profitability. Anu's currently contract-manufactures Ciprofloxacin Hcl for Dr. Reddy's Laboratories Limited. Anu's is of the view that there is large scope for extending such services to other companies both in India and abroad. It therefore intends to upgrade its manufacturing facilities so as to make them compliant with the norms laid down by international regulatory authorities like the United States Food and Drug Administration (USFDA). To offer contract research sevices, Anu's is planning to set up a pilot plant for carrying out CRAM at Jawaharlal Nehru Pharma City, Visakhapatnam.
Fund Requirement (Rs Cr.) - 8.34
- Meeting long term working capital requirement.
Fund Requirement (Rs Cr.) - 16.67
- Anu Laboratory was incorporated in the year 1996 for manufacture of Bulk Active Pharma Ingredients and Intermediates for drug molecules.
- Group Companies
Anu's Laboratories Limited has three Group companies: Nitya Laboratories Limited (NLL), Zen Chemi Consultech Private Limited (ZCPL), and Zen Absorptions Private Limited (ZAPL). NLL is a contract manufacturer for Anu's, while ZCPL and ZAPL are unrelated to Anu's. All the three Group companies have incurred losses during the last three financial years.
Company Business
- The company started its own manufacturing facilities in the year 1998 from Chilakamarri Village, Shadnagar, Mahboobnagar, District, Andhra Pradesh with manufacturing of 2,4 Dichloro 5 Fluoro Acetophenone (DCFA).
- Further with a view to add more products in its product profile Anu entered into contracts in 2004 with Nitya Laboratories Limited for conversion jobs for manufacture of Sodium Methoxide and CIS (+) Hydroxide Lactam.
- The Products of Anu's can be divided in three categories
a) Basic Intermediates
b) Advanced Intermediates
c) Fine Chemicals
Anu's supplies these to various drug manufacturers.
- Anu's had started export of its products in the year 2002 to Israel followed by exports to other countries like Italy, Japan, France, USA and Singapore. Currently, exports comprise of 19.97% of its total turnover.
- The Company has a team of 25 chemists who are engaged in research and development.
- Anu Labs product list:
Product |
Markets |
Type of Intermediate |
% Sales YM07 |
% Sales 9D07 |
Applications |
DCFA |
Domestic |
Basic |
39.88 |
28.81 |
It is the starting intermediate for Ciprofloxacin which is a broad spectrum antibiotic. |
Methyl-4 a |
Domestic |
Advanced |
18.3 |
24.54 |
It is used as an intermediate in the manufacture of Fexofenadine an anti allergic drug. |
Chlorohexanone |
Domestic & International |
Advanced |
5.39 |
8.95 |
It's a key intermediate in the manufacture of Pentoxyfiline which is a cardio vascular medicine. |
CIS (+) Hydroxy Lactam |
Domestic & International |
Advanced |
21.01 |
24.27 |
It's an advanced intermediate used in the manufacture of Diltiazem which is a cardio vascular drug. |
Sodium Methoxide(SMO) |
Domestic & International |
Fine Chemical |
11.21 |
9.73 |
It is used as a catalyst in making of chemicals and Bio Fuels. |
Financial Statements Data |
|
|
|
|
|
(Rs Cr) |
9D07 |
YM07 |
YM06 |
YOY |
YM05 |
Total Income |
113.82 |
121.29 |
95.33 |
27.23 |
67.22 |
Net Profit |
13.12 |
13.59 |
5.57 |
143.99 |
1.94 |
Net Profit Margin |
11.53 |
11.20 |
5.84 |
|
2.89 |
Net Worth |
44.95 |
31.51 |
12.88 |
144.64 |
7.44 |
Fixed Assets |
25.54 |
24.65 |
13.61 |
|
9.98 |
Inventories |
40.79 |
34.50 |
23.28 |
|
17.96 |
Cash and bank balances |
0.17 |
1.77 |
0.15 |
|
0.41 |
Loans and Advances |
14.31 |
9.55 |
3.37 |
|
2.93 |
Sundry Debtors |
21.65 |
7.28 |
5.09 |
|
9.55 |
Long Term Debt |
35.21 |
26.50 |
17.73 |
|
10.45 |
Current Liabilities |
21.88 |
19.44 |
14.86 |
|
21.94 |
Deferred Tax Liability |
3.11 |
2.99 |
1.93 |
|
1.31 |
|
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|
|
|
|
Issue Related Facts |
|
|
|
|
|
No of Shares before the issue (Cr) |
0.83 |
|
|
|
|
No of Shares after the issue(Cr) |
1.21 |
|
|
|
|
Share Price at upper band |
210 |
|
|
|
|
Share Price at lower band |
200 |
|
|
|
|
Net Worth after the issue at upper band (Cr) |
125.17 |
|
|
|
|
Net Worth after the issue at lower band (Cr) |
121.35 |
|
|
|
|
Book Value before the issue (Rs) |
54.45 |
|
|
|
|
Book Value after the issue at upper band (Rs) |
103.65 |
|
|
|
|
Book Value after the issue at lower band (Rs) |
100.49 |
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|
|
Valuations |
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|
|
|
|
EPS(last twelve months) (Rs) |
14.49 |
|
|
|
|
Price Earning Ratio at upper band |
14.50 |
|
|
|
|
Price Earning Ratio at lower band |
13.81 |
|
|
|
|
Return on Average Net Worth (%) |
34.32 |
61.23 |
54.82 |
|
|
Return on Capital Employed(%) |
42.70 |
49.20 |
42.30 |
|
|
Long Term Debt/Equity |
0.78 |
0.84 |
1.38 |
|
1.40 |
Price to book value at upper band |
3.86 |
|
|
|
|
Legend
9D07: 9 months ending December 2007
YM07: Full year ending March 2007
YM06: Full year ending March 2006
YM05: Full year ending March 2005
Industry overview
1. Global Scenario
In the year 2006 the total pharmaceutical market grew 7.0% to reach $643.00 billions. The contribution to sales for different regions were as follows.
Region |
US$Bn |
% of Global Sales |
North America |
289.9 |
47.70% |
Europe |
181.8 |
29.90% |
Japan |
56.7 |
9.30% |
Asia/Africa/Australia |
52 |
8.60% |
Latin America |
27.5 |
4.50% |
2. Indian Pharmaceutical Industry
- The Indian Pharmaceuticals sector has come a long way, being almost non-existent during 1970, to a prominent provider of health care products, meeting almost 95% of country's pharmaceutical needs.
- Currently the Indian pharmaceutical industry is valued at approximately US$ 8.0 billion.
- Indian pharmaceutical industry can be widely classified into bulk drugs and formulations.
Bulk drugs (Indian name of Active Pharmaceuticals Ingredients)
The Indian API manufacturing industry is the third largest in the world with sales of US$2 billion (€1.56bn) in 2005, and is expected to touch US$4.8 billion by 2010, at an average yearly growth rate of 19.3%.The bulk drug market is fragmented with about 1,333 pharmaceutical companies. Near about 70% of the bulk drug manufactured in India is exported to more than 50 countries. The market size is expected to grow at higher percentages in future years with more and more international companies depending on India to meet their bulk-drug supply needs.
Formulations
The formulation segment as on 2004 is valued at Rs.293 billion. Most of the domestic demand for formulations is met by the domestic industry.
- Globally, the Indian industry ranks 4th in terms of volume and 13th in terms of value.
- Indian pharmaceuticals industry has over 20,000 units. Around 260 constitute the organized sector, while others exist in the small scale sector.
- However, the Indian pharmaceutical sector is currently undergoing unprecedented change. This can be attributed largely to the country's introduction of product patents on January 1, 2005.
3. Major Drivers of Indian Pharmaceutical Industry
- Research and development
- CRAMs
- Growing Exports
- USFDA plants and DMF filings
Peers comparison
SMS Pharma |
|
|
|
|
Dishman Pharma |
|
|
YM08 |
YM07 |
YOY |
|
9M07 |
9M06 |
YOY |
Total Income |
215.6 |
198.58 |
8.57 |
|
593.4 |
380.05 |
56.14 |
Net Profit |
27.06 |
25.47 |
6.24 |
|
81.7 |
59.82 |
36.58 |
Net Profit Margin |
12.55 |
12.83 |
|
|
13.77 |
15.74 |
|
Shares |
1 |
|
|
|
7.75 |
|
|
EPS |
27.06 |
|
|
|
14.02 |
|
|
Share Price |
233 |
|
|
|
300 |
|
|
PE |
8.61 |
|
|
|
21.40 |
|
|
M Cap |
233 |
|
|
|
2325 |
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