Rs 570-crore Innova Captab IPO with price band of Rs 426-448 opens on December 21

Innova Captab IPO | The initial public offering by the pharmaceutical company comprises a fresh issuance of shares worth Rs 320 crore and an offer-for-sale (OFS) of Rs 250 crore by the existing shareholders.

Innova Captab, the Himachal Pradesh-based pharmaceutical finished dosage formulation manufacturing company, has fixed a price band at Rs 426-448 per share on December 16, for its Rs 570-crore public issue opening next week.

The issue will open for subscription during December 21-26, while the company will launch its anchor book for a day on December 20.

The initial public offering by the pharmaceutical company comprises a fresh issuance of shares worth Rs 320 crore and an offer-for-sale (OFS) of Rs 250 crore by the existing shareholders.

Manoj Kumar Lohariwala and his brother Vinay Kumar Lohariwala, the promoters of the company, will be selling 19.53 lakh equity shares each in the OFS.

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Further, other than promoters, Gian Parkash Aggarwal, one of the public shareholders, will sell 16.74 lakh equity shares in the OFS.

The contract development and manufacturing organization for Indian pharmaceutical industry has already raised Rs 30 crore in a pre-IPO placement at Rs 448 per share, the upper price band set by the company on December 16.

Apart from this, Innova Captab also mopped up Rs 50 crore via cumulative compulsorily convertible preference (CCPS) shares at Rs 354 per CCPS. With this, the total fund raising in pre-IPO placement was Rs 80 crore. The said CCPS were converted into 14,12,430 equity shares on December 1, 2023.

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The previous fresh issue size of the company was Rs 400 crore as per the draft red herring prospectus filed in June 2022. Now, with the Rs 80 crore fund raising, the revised size of the fresh issue is up to Rs 320 crore.

With two facilities in Baddi (Himachal Pradesh), the healthcare company will repay debts amounting to Rs 168 crore and spend Rs 72 crore for its working capital requirements, through the net fresh proceeds. It will keep the remaining proceeds for general corporate purposes.

As of October 2023, the secured borrowings on its books stood at Rs 457.7 crore and subsidiary Univentis Medicare’s (UML) at Rs 175 crore.

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Half of the public issue size has been reserved for qualified institutional buyers, 15 percent for high networth individuals, and the rest of 35 percent for retail investors.

Investors can bid for a minimum of 33 equity shares and in multiples of 33 shares thereafter. Rs 14,784 is the minimum investment can be made by retail investors for 33 shares, and their maximum investment will be Rs 1,92,192 for 429 shares as they can not exceed the investment limit of Rs 2 lakh in any IPO.

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Apart from a contract development and manufacturing organization (CDMO) business, Innova Captab also caters to the domestic as well as international branded generics business.

The book running lead managers to the issue are ICICI Securities and JM Financial.