Eris Life Sciences Limited is an Ahmedabad, Gujarat based pharma company that manufacture drugs. It is coming up with a 2000 cr IPO. Should you invest in it? Let see what the Eris Life Sciences IPO Review tells us.
About the company – A relatively new company, Eris Life Sciences started its journey in 2007. Eris Lifes Siences is basically a drug manufacturing company that manufactures, develops and markets branded pharmaceutical products. It focuses in selective therapeutic areas within the acute and chronic categories such as anti-diabetics, cardiovascular, gastroenterology, vitamins and anti-infectives. It also focuses on developing products in the acute and chronic category that have close link with disorders pertaining to lifestyle. The products in chronic category of the Indian pharma market generated 64.2% of revenues in 2016 fiscal year.
They are the fastest growing company in terms of revenues in the chronic category of IPM in the fiscal 2017. They were also ranked 20th. among 377 domestic and international companies in the Indian pharma market present in chronic category of medicines. They have achieved a 17% CAGR (compounded annual growth rate) from fiscal 2013 to fiscal 2017. In fiscal 2017 they generated 34.4% of revenues from chronic category.
Issue highlights (tentative)
Issue opens on – 16 June, 2017
Issue closes on – 20 June, 2017
Face value – Rs 1
Issue price – Price band of Rs 600 to Rs 603 per equity share
Lot size – 24 nos. or in multiples thereof
Issue size – 28,875,000 nos. of equity shares
Listing exchange – NSE, BSE
Finalisation of allotment – 23 June, 2017
Refund initiation – 27 June, 2017
Credit to demat account – 29 June, 2017
Trading commencement of equity shares at exchanges – 29 June, 2017
Promoters to the issue – Amit Indubhushan Bakshi, Himanshu Jayantbhai Shah, Inderjeet Singh Negi, Rajendrakumar Rambhai Patel and Kaushal Kamlesh Shah.
Registrar to the issue – Link Intime India Private Limited
Eris Life Sciences IPO Review:
The Eris Life Sciences IPO review finds the PE of current IPO is around 34x at price Rs 603 (as per EPS Rs 17.61 in the fiscal 2017). The sectoral average PE is 37x. So we can say the issue is fairly priced. The Eris Life Sciences IPO Review recommends a buy of the IPO for medium term investment purpose keeping sectoral performance in view. The company business model is also good. But there are negative points as well as the company partly depend on outsourcing from third party manufacturers. In addition there are outstanding legal proceeding against the company, its directors and promoters. Adverse/ unfavourable outcome of these proceedings and dependence on third party manufacturer may affect company financials in future.
Partha, an engineer by education, is theoratically actively following the stock and commodity markets since 1990. He is an active trader since 2003. He has received formal education in future and options and quantum analysis. He is presently working on research oriented projects using Python and data analytics.