Alkem Labs fixes IPO price band at Rs1,020-1,050; to raise up to Rs1,350 cr

Generic and specialty drug manufacturer Alkem Laboratories Ltd has fixed the price band of shares to be sold at its intial public offer (IPO) between Rs1,020 and Rs1,050. The IPO, which will open for subscription on 8 December, will be one of the biggest public market floatations by an Indian drug maker.

Alkem Laboratories will offer to sell up to 12.8 million equity shares, worth around Rs1,300 crore at the lower band and Rs1,350 at the upper band. The IPO represents 10.75 per cent of the promoters' holding in the company.

The IPO will close for subscription on 10 December.

Alkem Laboratories, which had a portfolio of 705 brands in the domestic market as of 30 September, plans to expand its footprint globally.

"We have total of 16 manufacturing facilities, of which 14 facilities at five locations in India and two in the US. Five of the facilities are USFDA approved, mainly catering to sales in US markets," Alkem Labs joint managing director Sandeep Singh said.

"Our most significant therapeutic areas in domestic market are anti-infectives, gastro-intestinal, pain and analgesics, and vitamins, minerals and nutrients.

"These therapeutic areas accounted for 80.7 per cent of our total sales in the domestic market for fiscal year 2015," Alkem Labs CEO Prabhat Agarwal said.

"We have four research and development facilities, two in India and two in the United States. We employed 480 scientists in research and development functions and our expenditure on R&D amounted to 4.5 per cent of our net revenues from operations for fiscal year 2015", Agarwal said.

"Having established ourselves in the Indian pharma market, we have expanded internationally through both organic growth and certain strategic acquisitions in the US, which is our key focus market," Singh said.

He said Alkem has filed 69 abbreviated new drug applications (ANDAs) in the US, of which 21 have received final approval and three have received tentative approval while 45 are pending.

The company is also looking at inorganic growth in the future and is open to acquisitions, Singh said.

Nomura Financial Advisory and Securities India, Axis Capital, J P Morgan India and Edelweiss Financial Services acted as global coordinators and book running lead managers, respectively, to the issue.