Macleods Pharmaceuticals Ltd IPO

Last Updated on October 17, 2023 by BFSLTeam BFSLTeam

Macleods Pharmaceuticals filed its initial papers with SEBI in February 2022 to launch an IPO. This IPO is supposed to be one of the biggest IPOs in the Indian pharma sector. The Macleods Pharmaceuticals Ltd IPO will purely be Offer for Sale and the company will not receive any proceeds. 60.48 million shares will be offered by several promoters and promoter groups in order to raise an amount of approximately Rs. 5,000 crore.

Macleods Pharmaceuticals is a Mumbai-based drugmaker. The company manufactures and distributes formulations over therapeutic areas such as dermatology, cardiovascular, anti-infectives, hormone treatment, etc. 

Macleods Pharmaceuticals Ltd IPO price, date, lot size, and other details are yet to be announced. We have presented all the essential details available about the company. Read below!

About Macleods Pharmaceuticals Ltd.

Founded in 1989, Macleods Pharmaceuticals Ltd is a leading global pharmaceutical company headquartered in India and ranked 7 in the Indian Pharmaceutical Market (IPM) based on its domestic sales.

The vertically integrated pharma company, which is wholly owned by its promoter group, specialises in the development, manufacturing and marketing of a wide range of products in major therapeutic areas. This includes anti-infectives, cardiovascular, anti-diabetic, dermatological and hormonal treatments. 

In FY21, the company’s domestic business, which includes branded generics accounted for 51.73% of its total revenue, making it the 2nd largest in the covered market. The company boasts 65 pre-qualified WHO product registrations as of December 31, 2021, including 32 anti-TB products.

With a strong focus on growth, the company expanded its portfolio from 6 to 14 brands with domestic sales exceeding Rs. 500 crore between FY17 and FY21. 

Additionally, the company maintained its position as the 2nd largest company in the Indian pharma sector (by domestic sales) for five consecutive years (FY 2017 to FY 2021). The company operates nationwide in India through a dedicated sales force comprising over 4,900 medical representatives as of September 30, 2021.

Company Financials 

Potential investors can refer to the table below which includes crucial financial details of this company for recent years. 

Parameters as Per the Year Ending On	March 31 2021	March 31 2020	March 31 2019
Total Assets	57,347.37	95,733.87	75,688.69
Total Liabilities	19,399.63	20,067.50	15,545.93
Total Expenses	52,434.58	54,023.35	47,950.17
Total Revenue	77,494.84	72,621.33	63,128.98
Profit After Tax	20,227.48	15,721.15	14,234.59
EBITDA	13,408.93	17,243.18	20,966.60
Earnings Per Share (EPS) (Basic & Diluted) *	33.74	26.18	23.72

*All values are in Rs. millions except EPS 

Also Read: How To Apply For An IPO?

Strengths of Macleods Pharmaceuticals Ltd.

Here are some of the key strengths that have allowed Macleods Pharmaceuticals Ltd to maintain a market-leading position for years: 

• In FY21, the company derived 51.73% of its total revenue from its Indian operations, which increased to 63.93% in the six months ending on September 30, 2021. 
• The company ranked 3rd among competitors in the Indian pharmaceutical market, outperforming with a 15.3% CAGR in domestic sales from FY11 to FY2021, compared to an annual market growth of 10.8%. Its growth raised the company from 16th to 8th in IPM rankings between FY 2011 and FY 2016.
• Macleods Pharmaceuticals has demonstrated its branding expertise with a portfolio of 595 brands in IPM between FY17 and FY21. Its flagship brand, Panderm++, a dermatological formulation achieved a remarkable CAGR of 52.1% in domestic sales from FY19 to FY21 crossing the Rs. 1 billion mark in FY21.
• Its operations span across geographies, product offerings and business models, with 48.27% and 36.07% of its total revenue from operations coming from outside India in FY2021 and H1 2021, respectively.
• Using its position in the American and European markets, the pharma company can strategically enter emerging markets. Its products reach more than 170 countries through a customised business model, ensuring profitable international trade. 
• With subsidiaries, affiliates, branches and a global workforce of over 200 employees, the company operates directly in more than 25 countries outside India as of September 30, 2021.

Risks Involved 

Along with strengths, investors must assess the underlying risks that pose significant threats to a company’s growth and financials. Here are a few for Macleods Pharmaceuticals: 

• The company may face shortages or increases in raw material prices and input costs due to factors such as macroeconomic events, material quality, currency changes and regulatory issues. Although it manufactures some materials in-house, Macleods Pharmaceuticals mostly relies on domestic and international third-party suppliers, including imports from countries such as China, to meet its operational needs.
• Failure to adhere to stringent quality standards and manufacturing practices may result in increased product liability. The company must adhere to various quality standards, customer agreements and global manufacturing practices. Failure to comply with these requirements may result in product recalls, fines, regulatory sanctions and liability claims.

Also Read: Risk of investing in IPO

Summary 

Macleods Pharmaceuticals Limited is entirely owned by its promoters. It has grown organically since its establishment, without raising any funds externally. The company has also built an international presence. 

By offering a mega Rs. 5,000 crore OFS, the Macleods Pharmaceuticals Ltd IPO aimed to achieve the benefits of listing on Indian stock exchanges and offer an exit route for its investors. However, due to the lowering of its valuation, the company has recently put its IPO plans on hold.

Also Read: Benefits of Investing in IPO

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