Sotac Pharmaceuticals Limited IPO

Apply 0
Avoid 0

i. Sotac Pharmaceuticals is in the business of manufacturing of pharmaceutical products for different marketers on loan license or contract manufacturing basis. The business is majorly on principle to-principle basis with different marketers. They cater to 162 corporate clients on loan licence and/or contract manufacturing basis.

ii. Their manufacturing facility at SOTAC Pharmaceuticals Limited is installed with capacity to manufacture 360 Crore tables / year, 32.40 Crore Capsules / year, 2160 Kilo Litter syrup / year and 324 Tons external preparation / year

iii. They have 71% holding in SOTAC Healthcare Private Limited (SOTAC Healthcare), and 100% of SOTAC Research Private Limited (SOTAC Research), thus making them their Subsidiary Companies. SOTAC Healthcare is engaged in the business of manufacturing of Beta-lactam drugs. SOTAC Research is engaged in the business of pharma molecule research and development.

iv. They have recently started a new venture namely SOTAC Lifescience Private Limited (SOTAC Lifescience). They hold 51% of total paid-up capital of SOTAC Lifescience. SOTAC Lifescience is a newly incorporated company and will be engaged in the business of Manufacturing of Nutraceuticals products and food products on contract-manufacturing basis. SOTAC Lifescience is in process of setting-up its manufacturing plant and yet not commenced commercial production.

v. Their group’s therapeutic portfolio includes Anti-Diabetic, Anti-Psychotic, Vitamins, Minerals, Iron, Anti-Cold, AntiAllergic, Derma Products, Antacid, Anti-Ulcerants, PPI, Anti-Emetics, Cardiac, Anti-Hypertensives, Analgesic, AntiPyretic, Anti-Inflammatory, Anti-Bacterial, Anti-Viral, General Antibiotics IP-Lactams & Non-IP-Lactams, Anti-Fungal, Cephalosporin.

vi. As a group, they cater to a wide spectrum of companies for formulation development, clinical batch production, commercial scale productions.

vii. Sotac Pharmaceuticals manufacturing facilities are situated at Sanand GIDC–II in Ahmedabad district of Gujarat, which offers easy and convenient accessibility.

viii. The Company has marked its presence in both domestic as well as global markets. Their products are supplied in 14 major states in India.

Competitive Strengths

i. Experienced Promoters and Management Team
ii. Wide range of Products
iii. Strategic Location of Manufacturing Facilities

 

Objects of the Sotac Pharmaceuticals Limited IPO:

The Issue Proceeds from the Fresh Issue will be utilized towards the following objects: i. To Meet Working Capital Requirements ii. Investment in Subsidiary iii. Upgradation / Construction of Existing /New Building in the Existing Premises iv. General Corporate Purpose v. To meet Public Issue Expenses
DRHP of Sotac Pharmaceuticals Limited IPO
RHP of Sotac Pharmaceuticals Limited IPO

Sotac Pharmaceuticals Limited IPO Details:

Open Date: Mar 29 2023
Close Date: Apr 03 2023
Total Shares: 3,000,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 33.3 Cr.
Lot Size: 1200 Shares
Issue Price: ₹ 105-111 Per Equity Share
Listing At: NSE Emerge
Listing Date: Apr 13 2023

Promoters And Management:

Mr. Sharadkumar Dashrathbhai Patel aged 43 years is Promoter-Chairman and Managing Director of the Company. He is having more than 15 years of experience in the field of Pharmaceutical industries. He was appointed as a PromoterExecutive Director of the Company since incorporation of the company i.e. December 18, 2015. Thereafter his designation was changed as Chairman and Managing Director for a period of 5 (Five) years w.e.f. December 12, 2022. He plays key role in overall operation of the company. Mr. Dineshkumar Babulal Gelot aged 39 years is Promoter- Whole Time Director of the company. He is having more than 14 years of experience in the field of Pharmaceutical industries. He was appointed as a Promoter- Executive Director of the Company since incorporation of the company i.e. December 18, 2015. Thereafter Designation was changed as Whole Time Director for a period of 5 (Five) years w.e.f. December 12, 2022. He plays significant role in production department of the company. Mr. Chetankumar Bachubhai Patel aged 43 years is Promoter-Executive Director of the company. He is having more than 15 years of experience in the field of Pharmaceutical industries. He was appointed as Promoter-Executive Director of the company since incorporation of the company i.e. December 18, 2015.Thereafter his remuneration was revised as an Executive director w.e.f. December 12, 2022. He plays significant role in Quality Checking (QC) department of the company.

Financials of Sotac Pharmaceuticals Limited IPO:

Particulars (in Lakhs) 2022 2021 2020
Revenue From Operations 7,315 4,884 2,860
COGS 5,616 3,967 2,175
Purchase of Stock-In-Trade 27 23 16
Change in Inventories -45 -51 -49
Employees Benefit Expenses 298 282 171
Other Expenses 806 517 360
EBITDA 613 146 187
OPM 8.38% 2.99% 6.54%
Other Income 22 11 22
Depreciation 113 259 140
Finance Cost 53 102 33
PBT 469 -204 36
Tax 182 31 27
PAT 287 -235 9
NPM 3.91% -4.80% 0.31%
Shares 110.5 110.5 110.5
EPS 2.60 -2.13 0.08

Comparison With Peers:

Name of the Companies Revenue (Cr) Profit (Cr) EPS P/E CMP MCap
Sotac Pharmaceutical Limited 79 0.93 0.84 132 105 122
Lincoln Pharmaceuticals Limited 500 71 36.62 9.68 345 691
Note: Data of Fy23 is taken for comparison  

Recommendation on Sotac Pharmaceuticals Limited IPO:

Review and Recommendation of Sotac Pharmaceuticals by IZ team is 2/10 1. SOTAC Pharmaceuticals Limited is part of SOTAC group, based at Gujarat and they are in business of manufacturing of pharmaceutical products for different marketers on loan license or contract manufacturing basis. 2. They are specialised in the manufacturing of a wide range of pharmaceutical products such as Non Beta-Lactam (general) tablets, Non Beta-Lactam (general) capsules, Non Beta-lactam Syrup and external preparations. 3. The Company has marked its presence in both domestic as well as global markets.The products are supplied in 14 major states in India. 4. Its manufacturing units manufacture 56 under its own brands for Domestic market and 14 products are majorly sold in USA. 5. Revenue of the company has grown from 28 Crores in Fy20 to 73 Crores in Fy22. 6. EBITDA margins are very volatile. In Fy20, it was 6.54%, in Fy21 it is just 3% and in Fy22 it again rises to 8.38%. 7. Asking P/E based on Fy23 numbers is 132x, so, nothing is left for the investors in the company. 

 

Lead Manager of Sotac Pharmaceuticals Limited IPO:

  1. Beeline Broking Limited

Registrar of Sotac Pharmaceuticals Limited IPO:

  1. Kfin Technology Private Limited

Company Address:

Sotac Pharmaceuticals Limited Plot No. PF-21, Nr. ACME Pharma, Opp. Teva Pharma Sanand GIDC-II, Sanand Ahmedabad - 382110 Phone: +91 90819 93300 Email: compliance@sotacpharma.com Website: http://www.sotacpharma.com/

Discussion on Sotac Pharmaceuticals Limited IPO:

Leave a Reply