Accretion Pharmaceuticals Limited is gaining attention as one of the most promising and rising groups in the healthcare industry. Known for its legacy of delivering high-quality healthcare products, including Ayurveda, Nutraceuticals, and Pharmaceuticals, the company has built a strong reputation over the years. With its diversified business model, Accretion Pharmaceuticals has positioned itself as a conglomerate, comprising four robust companies with a collective workforce of over 400 people. The company continues to show year-on-year progress, which contributes to its steady growth trajectory.

The company has announced the launch of its IPO, which is expected to raise ₹29.75 Crores. This amount is entirely a Fresh Issue, offering 29.46 Lakh shares to the public. The Accretion Pharmaceuticals IPO opens for subscription on May 14, 2025, and will close on May 16, 2025. The allotment of shares is expected to be finalized on or about May 19, 2025, with the tentative listing date set for May 21, 2025, on the NSE SME platform.

IPO Price Band and Market Capitalisation

The IPO's price band has been set at ₹96 to ₹101 per equity share. If the shares are priced at ₹101 per share, the Market Capitalisation of Accretion Pharmaceuticals Limited will be ₹112.27 Crores. Retail investors looking to participate in the IPO will need to invest a minimum amount of ₹1,21,200 for 1,200 shares, while High Net-Worth Individuals (HNIs) will need to invest ₹2,42,400 for 2,400 shares. The IPO presents an opportunity for investors to tap into a growing healthcare company with solid financial foundations.

Subscription Dates and Allotment Information

The Accretion Pharmaceuticals IPO subscription period is expected to be a critical phase for the company. The subscription opens on May 14, 2025, and closes on May 16, 2025. Retail investors can expect the allotment to be finalised on May 19, 2025. To check the allotment status, investors can visit the registrar website provided by Kfin Technologies Limited. The steps to verify allotment status include selecting Accretion Pharmaceuticals IPO from a dropdown list, entering the application number, PAN, or DP Client ID, and submitting the details.

Grey Market Premium (GMP)

The Grey Market Premium (GMP) for Accretion Pharmaceuticals' IPO is currently at ₹0, indicating that there is no significant pre-listing price movement or speculation in the grey market. It's essential to note that Grey Market Premiums often fluctuate based on market sentiment, and a ₹0 GMP may indicate a neutral view from investors. The GMP value reflects the demand and supply dynamics of the shares in the unorganised market but should not be relied upon for price discovery before the official listing.

Financial Performance and Key Metrics

The financials of Accretion Pharmaceuticals highlight a consistent growth pattern. For the fiscal year ended December 31, 2024, the company posted revenues of ₹3,574.93 Lakh, which shows a significant year-on-year increase from ₹3,393.86 Lakh in 2023. The EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) for FY24 stood at ₹882.45 Lakh, showing strong profitability. In terms of net profit, the company reported ₹523.55 Lakh in FY24, up from ₹387.53 Lakh in FY23.

The company’s pre-issue EPS (Earnings Per Share) stands at ₹9.69, and post-issue EPS is ₹3.49. The pre-issue P/E ratio is 10.42x, while the post-issue P/E ratio is 28.97x, which is close to the industry P/E ratio of 28x. The company boasts impressive Return on Capital Employed (ROCE) of 36.73% and Return on Equity (ROE) of 72.47%. These strong financials make the Accretion Pharmaceuticals IPO relatively attractive from a valuation standpoint.

Use of IPO Proceeds

The company intends to use the proceeds from the IPO for several important purposes, which include:

• Capital Expenditure: ₹269.73 Lakh for purchasing new equipment and machinery.

• Upgrading Manufacturing Facility: ₹465.57 Lakh will be allocated for upgrading the existing manufacturing facilities.

• Repayment of Borrowings: ₹99.17 Lakh will be used for the repayment/prepayment of borrowings.

• Working Capital: ₹1,468.00 Lakh will go towards funding the company’s working capital requirements.

• General Corporate Purpose: The remaining funds will be allocated for general corporate purposes.

Investment Perspective and Conclusion

Based on the financial metrics, the Accretion Pharmaceuticals IPO appears to be fairly priced, with a P/E ratio in line with the industry average. The strong growth in revenues, profitability, and the company's solid plans for future expansion give investors a promising outlook. However, with a Grey Market Premium of ₹0, it suggests that the market has a neutral sentiment towards the IPO's immediate listing gains.

Given the company’s sound financial performance and future growth plans, investors looking for exposure to the healthcare sector might find the IPO worth considering. However, those seeking short-term listing gains may wish to approach with caution due to the lack of significant Grey Market activity.

In conclusion, Accretion Pharmaceuticals IPO presents an opportunity for investors to tap into a growing healthcare company with strong fundamentals. We recommend investors to proceed with caution and consider the long-term growth potential rather than focusing on immediate listing gains.

The Upcoming IPOs in this week and coming weeks are Integrity Belrise Industries, Integrity Infrabuild Developers, Accretion Pharmaceuticals, Wagons Learning.

The Current active IPO are Virtual Galaxy Infotech.

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