The company derived 100% of its gross income (Rs374.52 crore) from the antibiotics category in the nine months ended December 2009
Chandigarh-based pharmaceutical company Parabolic Drugs Ltd (PDL) hits the primary market with its initial public offering (IPO) on 14 June 2010. The company has fixed the price band at Rs 75-Rs85 per share and plans to raise Rs200 crore through the issue.
The IPO has been assigned 'Grade 2' by ratings agency Brickwork, indicating 'below average' fundamentals. ICICI Securities Ltd and Spa Merchant Bankers Ltd are the lead book running managers to the issue. The issue closes on 17 June 2010.
Meanwhile, the BSE healthcare index has jumped 11% so far this year.
PDL derived 100% of its gross income (Rs374.52 crore) from the antibiotics category in the nine months ended December 2009 as it specialises in a limited number of therapeutic categories.
The company produces Semi Synthetic Penicillin (SSP) and Cephalosporin range of antibiotics in oral and sterile forms, along with their intermediates.
It had a cash flow of Rs4.42 crore for the nine months ended 31 December 2009. The company registered a net profit of Rs21.41 crore in the nine months ended December 2009 on a total income of Rs350.15 crore.
The company operates in a highly competitive environment especially in the Active Pharmaceutical Ingredient (API) product segment. Parabolic faces entry barriers as the research, testing, manufacturing, selling and marketing of pharmaceutical products are subject to extensive regulations, which differ from country to country.
The name and logo of 'Parabolic' are not registered trademarks of the company. A majority of its raw materials are imported from China. PDL imported 22.62% of its raw material from China in FY09. The company has filed 11 patent applications that are pending approval. The pharmaceutical industry is prone to patent and infringement risks.
The Director General of Foreign Trade (DGFT) and the ministry of commerce have demanded Rs2.17 crore from the company for non-fulfilment of certain export obligations. The company has made preferential allotments to various entities and promoters at different prices on the same date.
PDL will use the proceeds to set up a multi-purpose block III in Derabassi (Punjab), establishing a Sterile Cephalosporin plant at Derabassi, establishing of the Chachrauli plant (Haryana), and for investing in its subsidiary and repayment of loans. Its competitors like Neuland Laboratories and Dishman Pharma have EPS of Rs21.2 and Rs11.2 respectively. Parabolic's EPS has fallen from Rs12.70 in FY08 to Rs6.6 in FY09.
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