Akums Drugs and Pharmaceuticals IPO Review

Akums is among the largest domestic market-focused Indian CDMOs on a revenue basis serving IPM, with a market share of 9.3% by value in FY23 in the total addressable Indian domestic CDMO market and 8.8% by volume in the total IPM market in FY23. 

The Company led by a professional and experienced Promoters and managing directors, Mr. Sanjeev Jain and Mr. Sandeep Jain, both have extensive experience in the Indian pharmaceutical industry.

Financially, Akums revenue increased from ₹36,945.23 Millions in FY22 to ₹37,009.25 Millions in FY23 and currently increased at ₹42,122.07 Millions in FY24. Similarly, EBITDA also increased from ₹-690.89 Millions in FY22 to ₹3,840.55 Millions in FY23 and currently at ₹1,570.10 Millions in FY24. The PAT also increased from ₹-0.88 Millions in FY22 to ₹20.06 Millions in FY23 and currently declining at ₹-36.78 Millions in FY24. This does not indicate a steady financial performance.

For the Akums IPO, the company is issuing shares at a pre-issue EPS of ₹-0.24 and a post-issue EPS of ₹-0.23. The pre-issue P/E ratio is -2,829.16x, while the post-issue P/E ratio is -2,952.17x against the industry P/E ratio of 49.14x. The company's ROCE for FY24 is 3.37% and ROE for FY24 is 0.11%. These metrics suggest that the IPO is fully priced.

The Grey Market Premium (GMP) of Akums indicates potential listing gains of 10% to 15%. Given the company's financial performance and the valuation of the IPO, we recommend Investors to Avoid the Akums Drugs and Pharmaceuticals Limited IPO for Listing gain or long term investment purposes.