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Macleods Pharmaceuticals, a Mumbai-based pharmaceutical company, has filed preliminary paperwork with the Sebi for an initial public offering (IPO). This will be the second-largest pharma IPO, following Gland Pharma’s Rs 6,480 crore offering in November 2020. The issuance is wholly made up of an offer for the sale of 60.5 million equity shares by the promoters. The book-running lead managers for the IPO are Kotak Mahindra Capital Company, Citigroup Global Markets India, Edelweiss Financial Services, ICICI Securities, and Nomura Financial Advisory and Securities (India) Private Limited.

In this Article

Macleods Pharmaceuticals, situated in Mumbai, was founded in 1989 and is the seventh-largest medication manufacturer in the Indian Pharmaceutical Market in terms of domestic sales. The company derives 80% of its domestic sales from non-metros (greater than the IPM’s 70.0%) and 20% from metros. The company develops, manufactures, and markets a wide range of formulations and is well-known in North and East India for its anti-infectives, cardiovascular, anti-diabetic, dermatological, and hormone treatment brands.

Anti-diabetic, cardiovascular, derma, respiratory, and hormone therapies expanded with a CAGR of 28.5%, 13.4%, 11.7%, 11.0%, and 10.4%, respectively, outpacing IPM growth of 12.3%, 11.1%, 10.8%, 6.2%, and 6.9% for the same therapies over the same time period. In the last three fiscal years, the drug company launched new brands in the anti-diabetic market, such as Vildamac and Vildamac M, and has gained market share among non-innovator brands in the IPM (Vildamac comprised 7.3% of the Vildagliptin market, and Vildamac M comprised 8.6% of the Vildagliptin+Metformin market) by domestic sales.

The corporation operates in over 170 countries, spanning developed and emerging markets in North America, Europe, Africa, Asia, and South America, among others. Macleods also offers a diverse portfolio of anti-TB medications, including the most WHO-prequalified anti-TB products in the world, with 32 registrations.

Objective of the Issue

The object of the issue is to:

carry out the Offer for Sale of up to 60,482,040 Equity Shares by the selling shareholders
enhance the visibility and brand image as well as provide a public market for the equity shares in India

Macleods Pharmaceuticals IPO Financials

Metrics	2019	2020	2021
Revenue from operations	58,704.35	69,028.16	71,994.16
India	35,168.28	39,281.75	37,245.16
Outside India	23,536.07	29,746.41	34,749.00
EBITDA	13,408.93	17,243.18	20,966.60
EBITDA Margin	22.84%	24.98%	29.12%
PAT	11,921.30	14,611.95	16,307.18
PAT Margin	20.31%	21.17%	22.65%
ROCE	58.68%	65.49%	66.05%
Fixed Asset Turnover	6.10	6.68	5.69

Macleods Pharma IPO Key Points

Strengths

One of the Leading and Fast-Growing Companies with Significant Presence in the IPM
Proven Track Record of Building Brands
Diversified Presence across Global Markets with Calibrated Business Model
R&D-Led, Differentiated Portfolio of Products
Diversified and quality-compliant manufacturing capabilities

Risks

It may experience a shortfall in the supply of raw materials, an increase in their prices, or other input costs.
It could experience a material slowdown or shutdown in manufacturing or R&D operations
Failure to meet various quality standards and good manufacturing practices may result in increased product liabilities
It derives a significant portion of its revenue from operations from a limited number of markets