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28 September 2023

Mono Pharmacare IPO: Paving the Way for Healthier Opportunities

Introduction:

Mono Pharmacare Limited, incorporated in 1994, plays a pivotal role in the pharmaceutical industry by specializing in the marketing and distribution of pharmaceutical products. The company's product range encompasses healthcare products, antibiotic medicines, cough cold anti-allergic medicines, antifungal medicines, nutraceutical medicines, analgesic & antipyretic medicines, antacid & antiemetics medicines, cardiac-diabetic medicines, and cosmeceutical products. In 2022, Mono Pharmacare expanded its portfolio by acquiring DLS Export, further strengthening its presence in the pharmaceutical market.

IPO Overview:

The Mono Pharmacare IPO marked its presence as a book-built issue of Rs 14.84 crores, comprising a fresh issue of 53 lakh shares. The IPO subscription window opened on August 28, 2023, and closed on August 30, 2023. The allotment process was concluded on September 4, 2023, with shares making their debut on NSE SME on September 7, 2023. Priced in the range of ₹26 to ₹28 per share, the IPO required a minimum lot size of 4,000 shares, translating to a minimum investment of ₹112,000 for retail investors. High Net Worth Individuals (HNIs) needed to apply for a minimum of 2 lots (8,000 shares), amounting to ₹224,000.

Key Players:

Unistone Capital Pvt Ltd took on the role of the book running lead manager for the Mono Pharmacare IPO, while Bigshare Services Pvt Ltd acted as the registrar for the issue. Rikhav Securities served as the market maker.

Stock Performance:

As of September 27, 2023, Mono Pharmacare Limited's stock (Arrow) was trading at ₹32.40, reflecting a 2.21% increase. The stock had an open of ₹31.70, a high of ₹32.55, a low of ₹31.05, and a previous close of ₹31.70. Total traded value was 1,12,000 shares.

Ownership Structure:

The promoters of Mono Pharmacare Limited hold a significant stake in the company, with pre-issue shareholding at 81.02%.

Financial Performance:

Mono Pharmacare Limited displayed commendable financial performance over the years, experiencing consistent growth in assets, revenue, and profits. As of March 31, 2023, the company's total assets stood at ₹6,257.39 lakhs, generating substantial revenue. Profits after tax exhibited remarkable growth, and the company maintained a strong net worth of ₹1,724.07 lakhs, along with reserves and surplus of ₹131.71 lakhs. Total borrowings remained at ₹643.93 lakhs.

Performance Indicators:

Key performance indicators for the Mono Pharmacare IPO included a post-issue Price-to-Earnings (P/E) ratio of 40 and a Market Capitalization of ₹49.47 crores.

Objectives of the Issue:

The net proceeds from the IPO were allocated for the following purposes:

1. Meeting the working capital requirements.
2. General corporate purposes.
3. Covering the issue expenses.

Expert Opinion:

Noted that Mono Pharmacare is a distributor for many prominent pharmaceutical companies and demonstrated robust performance for the reported periods. Based on FY23 earnings, the issue appeared to be aggressively priced. Well-informed investors were encouraged to consider parking funds for medium to long-term rewards.

Subscription Status:

The Mono Pharmacare IPO garnered significant interest, achieving a subscription rate of 13.42 times as of August 30, 2023. Retail investors exhibited notable enthusiasm with a subscription rate of 19.40 times, while other categories also displayed active participation.

Conclusion:

Mono Pharmacare Limited, with its extensive product portfolio and consistent financial growth, has established itself as a key player in the pharmaceutical distribution sector. The IPO underlines the company's ambitions for expansion and growth in the pharmaceutical market. However, potential investors should carefully assess the pricing and competitive dynamics in the industry before making investment decisions.

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