Par Drugs and Chemicals Limited IPO

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1.  The Company was formed on 26.02.1999 in Dadra & Nagar Haveli in the name of “Par Drugs And Chemicals Private Limited” 

2. The Company is engaged in the development and manufacture of Active Pharma Ingredients (“APIs”) for the domestic market as well as for exports to international markets.

What are APIs?

The Active Pharmaceutical Ingredient (API) is the part of any drug that produces its effects. Some drugs, such as combination therapies, have multiple active ingredients to treat different symptoms or act in different ways.

All drugs are made up of two core components: the API, which is the central ingredient, and the excipients, the substances other than the drug that helps deliver the medication to our system. Excipients are chemically inactive substances, such as lactose or mineral oil.

For instance, if you have a headache, acetaminophen is the active ingredient, while the liquid in the gel-capsule or the bulk of a pill is the excipient.

3. The company presently has 12 APIs and 6 Fine Chemical under their portfolio which is marketed domestically and exported. They supply the products to approximately 16 countries, including both direct and indirect exports. In FY-18, the Domestic business contributed 97% of the revenue and rest by the International market.

Clients– Pfizer Ltd., Cipla Ltd., Cadila Healthcare Ltd., Meyer Organics Pvt. Ltd., Dabur India Ltd.

4. They currently own and operate two manufacturing facilities at Bhavnagar and Ankleshwar in Gujarat.

Par Drugs and Chemicals Limited IPO Stock Quote & Charts

47.00

-1.05%

  • Open: 47.00
  • High - Low: 47.00 - 47.00
  • Previous Close: 47.50
  • Total Traded Volume: 2000
  • Updated On: 20-Nov-2019

Objects of the Par Drugs and Chemicals Limited IPO:

The objective of raising 8.53 Cr from the issue is : a) Working Capital Requirement b) General Corporate Purposes

Par Drugs and Chemicals Limited IPO Details:

Open Date: May 03 2019
Close Date: May 08 2019
Total Shares: 1672000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Type
Issue Size: 8.53 Cr.
Lot Size: 2000 Shares
Issue Price: ₹ 51 Per Equity Share
Listing At: NSE Emerge
Listing Date: May 16 2019

Promoters And Management:

1. Falgun Vallabhbhai Savani, aged 44 years, is the Promoter, Chairman and Managing Director of our Company. He has been the Director of our Company since inception and was subsequently designated as Chairman and Managing Director of the Company w.e.f. November 26, 2018. He holds a Bachelor’s degree in Pharmacy from B. K. Modi Government Pharmacy College, Rajkot affiliated with Saurashtra University. He has 18 years of experience in API Industry. 2. Jignesh Vallabhbhai Savani, aged 41 years, is Promoter, CEO and Executive Director of our Company. He has been the Director of our Company since inception and was subsequently designated as CEO of our Company w.e.f. November 26, 2018. He has completed Matriculation education from Gujarat Secondary Education Board. He has 17 years of experience in the API Industry.

Financials of Par Drugs and Chemicals Limited IPO:

Particulars(Lakh) 2017 2018 2019 Post Issue
Balance Sheet Item
Share Capital 845 845 448.03 615.23
FV 10 10 10 10
Net Worth 1920 2069 2911.0 3763.72
Book Value 23 24 65 61.2
Long-Term Debt 1430.00 1306.00 603.00 603
Short-Term Debt 652.00 508.00 431.00 431
D/E 1.08 0.88 0.36 0.27
P/L Items
Revenue 4880.00 4241.00 4641.00 NA
EBITDA 851 801 830 NA
EBITDA Margins 17.4% 18.9% 17.9% NA
Profit 184 149 241 NA
PAT Margins 3.8% 3.5% 5.2% NA
EPS 2.99 2.42 3.92 3.92
Key Ratios and Valuation
RONW 9.6% 7.2% 8.3% 6.4%
P/E 13.0
P/B 0.8
Mcap 31 Cr
Mcap/Sales 0.67
EV 41 Cr
EV/EBITDA 5.1

Recommendation on Par Drugs and Chemicals Limited IPO:

Review and Recommendation of Par Drugs and Chemicals Limited IPO from IZ Team are 5/10. [ The issue is reasonably priced. The Employees quota in SME is something rare. We have to see how much it will get subscribed. However, the company has not shown growth in Revenue and EBITDA in the last 3 years. ]

Lead Manager of Par Drugs and Chemicals Limited IPO:

  1. Pantomath Capital Advisors Private Limited

Registrar of Par Drugs and Chemicals Limited IPO:

  1. Link Intime India Private Limited

Bid Details of Par Drugs and Chemicals Limited IPO as on
08-May-2019 17:00:00 IST

Category No.of shares offered No. of shares bid
794,000 2,706,000
794,000 6,214,000
84,000 84,000
1,672,000 9,004,000
QIBs No
QIBs+HNIs Subscription 3.41X
Retail Subscription 7.83X
Total Subscription 5.62X

Discussion on Par Drugs and Chemicals Limited IPO:

    Pros:

    1. The Issue is priced reasonably well in terms of P/E , P/B, and Mcap/Sales.

    2. The LM is Pantomath

    3. The company has a good clientele.

    4. The issue size is small.

    5. The company is continuously reducing the debt.

    Cons:

    The company has not shown any growth in Revenue and EBITDA in the last 3 years which is a big negative for the company.

    Listing gain might happen in this IPO.

    Apply for listing gain.