Earum Pharmaceuticals Limited IPO

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(i) The Company was Incorporated in the year 2012, and the Company is engaged in the pharmaceutical business involving Marketing, Trading, and distribution of wide range of pharmaceutical formulation products such as antibiotic drugs, anti-malarial drugs, anti-allergic & anti cold drugs, analgesic/ antipyretic & anti-inflammatory drugs, dermatology products, cerebral activator drugs, neurological drugs, gastrointestinal drugs, steroids, gynecology drugs, calcium, multivitamins, anti-oxidants and injections.

(ii) As on the date of Draft Prospectus, they offer around 125 pharmaceutical formulation products, of which around 24 products are marketed by them under our own brand name, the manufacturing of which is outsourced by them to third parties.

Apart from pharmaceutical formulation products, they also deal in trading of active pharmaceutical ingredients (API’s) such as Levofloxacin Hemihydrate IP Albendazol IP, Amoxicillin Trihydrate IP etc.

(iii) The Company has its registered office, corporate office, and warehouse situated at Ahmedabad (Gujarat). Mr. Bhumishth  Narendrabhai Patel, Chairman, and Managing Director and one of the Promoters of our Company have an overall experience of over 11 years in various segments of the pharmaceutical business.

Objects of the Earum Pharmaceuticals Limited IPO:

The Issue includes a fresh Issue of up to 18,48,000 Equity Shares of the company at an Issue Price of Rs. 36 per Equity Share.  The company intend to utilize the proceeds of the Issue to meet the following objects:- 1. To meet Working Capital requirements. 2. General Corporate Purpose 3. To meet issue expenses

Earum Pharmaceuticals Limited IPO Details:

Open Date: Jun 21 2019
Close Date: Jun 26 2019
Total Shares: 1848000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price
Issue Size: 6.65 Cr.
Lot Size: 3000 Shares
Issue Price: ₹ 36 Per Equity Share
Listing At: BSE SME
Listing Date: Jul 04 2019

Financials of Earum Pharmaceuticals Limited IPO:

(All figures in lakhs)
Year Revenue EBITDA OPM PAT NPM Shares EPS P/E
FY16 1,863.00 58 3.1% 9.76 0.52% 1.074 0.16 19.35
FY17 2,369.27 68 2.9% 15.98 0.67% 1.074 0.26
FY18 3,584.65 196 5.5% 85.65 2.39% 3.086 1.38
9MFY19 3,450.35 201 5.8% 86.51 2.51% 3.086 1.40
Post Issue(Annualized) 4600.00 268 5.8% 115.34 2.51% 62 1.86
Year Long-term Short-Term Net-Worth D/E Receivables days RONW
FY16 39.12 150.64 136.59 1.39 87 7.15%
FY17 56.19 149.55 152.58 1.35 55 10.47%
FY18 150.49 504.43 473.67 1.38 111 18.08%
9MFY19 159.51 581.08 507.59 1.46 154 17.04%
Post Issue(Annualized) 1172.87 0.63 9.83%

Comparison With Peers:

As per DRHP, the company has shown Vaishali Pharma SME as a peer. The Company's performance in the last one year is shown below which clearly states the sorry state of affair. The EPS for FY18 of Vaishali Pharma stands at 1.41 and CMP is 27[ 20.06.2019] So the P/E at present is 19 which is what Earum Pharmaceutical is asking.

Recommendation on Earum Pharmaceuticals Limited IPO:

Review and Recommendation of Earum Pharmaceuticals Limited IPO from IZ Team are 2/10. [ The Pharma Sector is out of flavor these days and have given a negative return in the past. The Peer Vaishali Pharma SME company is continuously falling in the last one year. The Receivables days are very high and keep on increasing year on year for Earum Pharmaceuticals which reflects the pain in the sector. The D/E on the basis of 9MFY19 is 1.45 which is high considering that the market is punishing high debt companies, pain can be seen after listing. The Issue price is quite aggressive at P/E multiple of 19.36x.]

Lead Manager of Earum Pharmaceuticals Limited IPO:

  1. Hem Securities Limited

Registrar of Earum Pharmaceuticals Limited IPO:

  1. Bigshare Services Private Limited

Bid Details of Earum Pharmaceuticals Limited IPO as on
26 Jun 2019 | 11:54:03 PM

Category No.of shares offered No. of shares bid
876,000 1,503,000
876,000 1,299,000
96,000 96,000
1,848,000 2,898,000
QIBs No
QIBs+HNIs Subscription 1.72X
Retail Subscription 1.48X
Total Subscription 1.60X

Discussion on Earum Pharmaceuticals Limited IPO: