- 06 May 2024
- ICICIdirect
Indegene Limited IPO: Issue size, price band and more
The equity market is volatile before the elections, but we see quite a few IPOs lined up for launch in May. In the second week itself, we have three big IPOs that will go live. The first one is Indegene Limited, a provider of digital-led commercialization services.
The IPO opens for subscription on the 6 May and closes on the 8 May. In this article, we look at the various aspects of Indegene's business to help you decide whether to subscribe or invest in the IPO.
Indegene Limited IPO: Key Details
Below are the key details related to the Indegene IPO:
- Issue Size: Rs 1,841.76 crore
- Price Band: Rs 430 - Rs 452
- Lot Size: 33 Shares
- Issue Details: Fresh Issue of Rs 760 crore + Rs 1,081.76 OFS
- Market Cap: At the upper price band, Rs 10,836 crore
- Minimum Investment: Rs 14,916
Indegene Limited IPO: The Business
Indegene provides digital-led commercialization services for the life sciences industry, including biopharmaceutical, emerging biotech, and medical devices companies, that assist them with drug development and clinical trials, regulatory submissions, pharmacovigilance and complaints management, and the sales and marketing of their products.
They have established client relationships with each of the 20 largest biopharmaceutical companies in the world by revenue for FY23. The company also provides digital asset management, marketing automation, customer data management, and analytics solutions to measure the effectiveness of marketing campaigns.
Since its inception, Indegene has completed a total of 13 acquisitions and enjoyed synergistic benefits from each of these acquisitions. As of December 31, 2023, the company had 65 active clients to whom they deliver solutions from their operation hubs located across North America, Europe, and Asia.
Indegene Limited IPO: Industry Overview
The life sciences industry comprises entities engaged in the research, development, manufacturing, and marketing of drugs and medical devices. The two main segments within this industry are the biopharmaceutical and medical devices segments:
- Biopharmaceutical. This segment comprises companies that discover, develop, manufacture, and sell drugs (chemical and biological-based) to cure, vaccinate, or alleviate symptoms of medical conditions or diseases.
- Medical devices. This segment comprises companies involved in the research, development, production, and sale of systems and devices of medical applications, i.e., to treat or diagnose diseases or medical conditions.
The combined sales of the biopharmaceutical and medical devices segments were estimated at $1.8 trillion in 2023, with biopharmaceuticals constituting 69% or $1.2 trillion. By 2026, the combined sales of the biopharmaceutical and medical devices segments are expected to reach 2.1 trillion, with biopharmaceuticals constituting 69% or $1.4 trillion.
Indegene Limited IPO: Listed Peers
There are no listed companies in India and globally that are of comparable size, from the same industry, and with a similar business model as that of Indegene. Accordingly, we cannot provide an industry comparison.
Indegene Limited IPO: Company's Financials
Let us look at their recent financial year's numbers to help you evaluate the company. Here are a few key points related to their financials:
- The revenue for FY21, FY22, and FY23 was Rs 966.27 crore, Rs 1,664.61, and Rs 2,306.13 crore, respectively. The top line grew at a CAGR of 54.50 % in the period between FY21 and FY23.
- The company has 27 clients from whom we earned between $1 million and $10 million in revenues, five clients from whom we earned between $10 million and $25 million in revenues, and three clients from whom we earned more than $25 million in revenues, during the 12 months ended December 31, 2023.
- Indegene has reported an EBITDA of Rs 263.96 crore, Rs 265.91 crore, and Rs 454.19 crore for FY21, FY22, and FY23, respectively. The EBITDA margins for the same period were 27.03%, 18.79%, and 19.69%, respectively. The margins have fallen in this period.
- They have reported a restated profit (PAT) of Rs 185.68 crore, Rs 162.82 crore, and Rs 266.10 crore for FY21, FY22, and FY23. The profit margins have reduced from 19.22% in FY21 to 11.54% in FY23.
- For the last three financial years, Indegene has reported an average EPS of Rs 9.64 and an average RoNW of 27.37%.
- If we attribute FY24 annualized earnings to its post-IPO fully diluted paid-up equity capital, then, the asking price is at a P/E of around 33.53.
Indegene Limited IPO: Competitive Strengths
Below are the competitive strengths of the company:
- Their understanding of the healthcare domain enables them to efficiently modernize and digitize the key functions involved in the life sciences commercialization process.
- Over the years, they have developed a suite of proprietary tools and platforms, including applications that automate and create AI-based efficiencies using AI, ML, NLP, and advanced analytics capabilities that are core components of their solutions.
- They have long-standing relationships with marquee biopharmaceutical companies, including each of the 20 largest biopharmaceutical companies in the world by revenue for FY23.
- The company caters to the needs of its clients from six operation hubs and 17 offices located across North America, Europe, and Asia.
Indegene Limited IPO: Associated Risks
Below are some risks the company has highlighted in their RHP:
- The business is solely focused on the life sciences industry and may be adversely impacted by factors affecting the life sciences industry, including the growth of the overall life sciences industry, outsourcing, and other trends.
- As their business is solely focused on the life sciences industry and a significant portion of their business is attributable to certain large clients located in North America and Europe, their business and profitability are dependent on factors affecting the life sciences industry and continuing relationships with such key clients.
- The business is solely focused on the life sciences industry.
- The majority of revenues are derived from their subsidiaries. Any disruptions in the operations of one or more of their subsidiaries may adversely affect their business, financial condition, and results of operations.
With this, we have covered all the essential information you must know related to Indegene IPO.