Indegene Limited: About the company
It provides tailored digital commercialization services for the life sciences industry, including biopharmaceutical, emerging biotech, and medical devices companies, that assist them with drug development, clinical trials, regulatory submissions, pharmacovigilance and complaints management, and the sales and marketing of their products.
Their clientele base includes the 20 largest biopharmaceutical companies in the world. They operate in 4 business verticals:
- Enterprise commercial solutions
- Omnichannel Activation
- Enterprise Medical Solutions
- Enterprise Clinical Solutions and consultancy services
Indegene Limited IPO Details:
IPO Date | 6th May-2024 to 8th May-2024 |
Face Value | ₹ 2/- per share |
Price Band | ₹ 430 to ₹ 452 per share |
Lot Size | 33 shares and in multiples thereof |
Issue Size | ₹ 1841 crores |
Fresh Issue | ₹ 760 crores |
OFS | ₹ 1081 crores |
Employee Discount | ₹ 30/- per share |
Expected Post Issue Market Cap (At upper price band) | ~ ₹ 10,814 crores |
Objects of Issue:
- Repayment/prepayment of the debt of one of the Material Subsidiaries.
- Funding the capex requirements of the company and one of the material subsidiaries.
- Funding inorganic growth
- Balance for General Corporate Purposes
Key Strengths:
- Growing patient awareness and adoption of remote monitoring and telehealth strengthening therapy engagement
- A detailed understanding of the healthcare domain enables us to efficiently modernize and digitize the key functions involved in the life sciences commercialization process.
- Barriers to entry in this industry are typically high.
- Its in-house R&D facilities have enabled the company to maintain steady growth in sales and profits.
Risks:
- Concentrated customers: Revenues from the top 5 and top 10 clients amount to 48% and 67% of the total revenues from operations for the nine months ending on 31st Dec 2023.
- Geographical concentration: Revenues from North America and Europe constitute 68%, and 27% respectively. Geo-political tensions between the 2 countries would affect the company's operations adversely.
- The company relies too much on sub-contractors and third-party service providers, exposing the entity various obligatory/satisfactory conditions.
- It operates in a regulated industry and our products and offerings are subject to changing laws, rules, regulations, and legal uncertainties.
Financial Snapshot:
Particulars | FY23 | FY22 | FY21 |
Revenue from operations (Rs. In Crores) | 2,306 | 1,665 | 966 |
YoY Growth | 39% | 72% | |
Adjusted EBITDA (Rs. In Crores) | 454 | 313 | 264 |
YoY Growth | 45% | 19% | |
Adjusted EBITDA Margin | 20% | 19% | 27% |
PAT (Rs. In Crores) | 260 | 163 | 149 |
PAT Margin | 11% | 10% | 15% |
RoNW | 25.02% | 21.57% | 46.04% |
Watch our Video on Indegene Limited IPO Review
Conclusion:
The life sciences industry comprises 2 main segments – Biopharmaceuticals and Medical Devices.
The combined sales of these segments were estimated to be US $1.8 trillion in 2023 and are expected to reach US $2.1 trillion by 2026, recording a growth of 5.5% CAGR.
There are no listed peers to compare its financial or operational performance we need to analyze the company with its given information. The company has shown decent growth in sales, EBITDA & EBITDA Margins. But the PAT Margins have formed a plateau. As, the management is willing to clear the debt taken in the previous year for an acquisition, which would result in savings in finance costs and improve the PAT margins and other key ratios. And currently it will be available at 38x earnings valuations.
Considering the company’s growth potential, valuations, and being a single player to offer such niche services we would suggest our investor to subscribe to this IPO for the long term.
Leave A Comment?