Akms Drugs plans to bring IPO within 3 years

“We are planning an initial public offering (IPO) in a period of 2-3 years,” Joint Managing Director Sanjeev Jain said in an interview.

Acums manufacturers 13% of all drugs consumed in India, making them for companies such as Cipla Ltd, Cadila Pharmaceuticals Ltd, Glenmark Pharmaceuticals Ltd, Novartis India Ltd and Mylan Pharmaceuticals Pvt. Limited

The proceeds from the IPO could help Akum secure the exit of foreign investor Quadria Capital (QC). “Quadria Capital (QC), a Singapore based healthcare focused private equity (PE) firm acquired 15.1% stake in the company for a total consideration of approx. 500 crores- of which Rs 180 crore was paid to the promoters for secondary share purchase 320 crore was invested in the company,” ICRA Ltd said in a June 2022 report.

“With regard to stake buyback, there was a clause in the agreement, according to which the company would have to buy back the stake from QC (hold the option with PE for the entire 500 crore investment) if it was unable to provide exit to the PE through IPO/secondary sale by March 2024,” ICRA said.

The Delhi-based company, however, is looking to make an investor exit through the IPO as it has capital infusion plans underway to reach the target of hitting the topline. 10,000 crores by the year 2028. As per the consolidated financial numbers available on Edge, Akums observed 3,677.2 crores of net sales in FY22 and losses 250.8 crores.

The company plans to more than double the net sales in the next five years and plans to achieve this through expansion outside India to Europe and other regions.

Going public can also help a company expand globally. “Currently, we are a big domestic player and make up around 13% of the total drugs consumed in the country. But our international business is a very small percentage of the total business and we are planning to grow it. Listing on exchanges will help us to increase our international presence as companies abroad prefer to do business with a listed entity. Also, once a company is listed, it becomes easier to attract good talent.”

The company is also expanding capacity at its existing facility, and is also acquiring production facilities of other companies. “We are also expanding and coming up with a new injection facility in Haridwar, having acquired a facility in Baddi where we will soon start manufacturing oral solids and liquids. We will also set up facilities wherever needed.”

The company, which currently has over 1,400 customers across the pharma, nutraceutical and FMCG sectors, is also looking at growing its active pharmaceutical ingredient (API) vertical as well as nutraceuticals, injectables and other product pipelines to drive the next round of growth focusing.