Business Profile of the Senores Pharmaceuticals Limited
Senores Pharmaceuticals is a leading pharmaceutical company committed to innovation and manufacturing high-quality products for the global healthcare industry. Under the guidance of industry veterans, they develop niche, complex, and specialty pharmaceuticals. Their vision is to become a global market leader in niche category products, bridging the gap between affordable healthcare and accessibility.
Senores Pharmaceuticals has operations in USA, India, Africa, Far East, CIS, Middle East, Latam and African Markets. Formulation Sites in India specialize in Oral solids, Injectables, Liquid and ORS are approved by 20 African MOH, Middle Eastern, CIS & Far East countries.
The Main Objectives to Launch the Senores Pharmaceuticals Limited IPO
As per the draft red hearing prospects, the IPO issue consists of both offer for sale and fresh issue by the company.
- The OFS consists of up to 2, 7000, 000 Equity Shares aggregating up to Rs. [●] million. Nothing from those proceeds of OFS will be allotted to company.
- Senores Pharmaceuticals IPO also has a fresh issue of Rs. 500 crores. Out of total issue; Rs. 107 crores will be used for capex, Rs. 93.7 crores will be used for payment of certain borrowings, Rs. 102.7 crores will be used toward working capital and rest for corporate expenses.
| Particulars | Estimated amount (₹ in million) |
| Funding Capex requirements by investment in of one of our Subsidiaries, Havix, for setting up a manufacturing facility for the production of sterile injections in Atlanta Facility | 107 |
| Re-payment of certain borrowings availed by Company and Subsidiaries, namely, Havix, Ratnatris and SP | 93.7 |
| Funding the working capital requirements of Company and Subsidiaries, namely, SPI and Ratnatris | 102.7 |
| Funding inorganic growth through acquisition and other strategic initiatives and general corporate purposes | [●] |
| Total | [●] |
IPO Details of Senores Pharmaceuticals Limited:
| IPO Open Date | N.A. |
| IPO Close Date | N.A. |
| Basis of Allotment | N.A. |
| Listing Date | N.A. |
| Face Value | ₹10 per share |
| Price | N.A. |
| Lot Size | N.A. |
| Total Issue Size | Up to [●] Equity Shares |
| aggregating up to ₹ [●] million | |
| Fresh Issue | Up to [●] Equity Shares |
| (aggregating up to Rs. 5000.00 million) | |
| Offer For Sale | Up to 2,700,000 Equity Share |
| aggregating up to ₹ [●] million | |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE & NSE |
| QIB Shares Offered | Not less than 75% of the Net Issue |
| Retail Shares Offered | Not more than 15% of the Net Issue |
| NII (HNI) Shares Offered | Not more than 10% of the Net Issue |
Issue Price & Size: Senores Pharmaceuticals Limited IPO
The issue price of Senores Pharmaceuticals Limited hasn’t been released yet. Upon releasing the dates, the investors can bid between those price ranges. The company only has an OFS of up to 6, 759, 480 equity shares and fresh issue of 550 crores.
Launch Date of Senores Pharmaceuticals Limited IPO
The IPO opening date of Senores Pharmaceuticals hasn’t been officially announced yet, upon the declaration of dates investor can bid for IPO.
Senores Pharmaceuticals Limited Financial Statements
| Particulars | FY24 | FY23 | FY22 |
| Income | |||
| Revenue from operations | 2145.24 | 353.37 | 141.7 |
| Other income | 28.18 | 36.84 | 4.61 |
| Total Income | 2173.42 | 390.21 | 146.31 |
| Expenses | |||
| Cost of materials consumed | 319.55 | 3.45 | 0.01 |
| Purchases of stock-in-trade | 703.01 | 129.03 | 104.33 |
| Changes in inventories of finished goods,
work-in- progress and stock-in-trade |
38.77 | -4.82 | -24 |
| Employee benefits expenses | 354.56 | 47.96 | 28.61 |
| Finance costs | 94.46 | 21.38 | 5.65 |
| Depreciation & Amortisation expenses | 100.18 | 17.79 | 7.05 |
| Other expenses | 313.45 | 51.08 | 13.23 |
| Total expenses | 1923.98 | 265.84 | 134.88 |
| Profit from continuing operations | 327.08 | 84.33 | 9.91 |
| Profit/(loss) from Discontinued operations | - | - | - |
| Profit for the period | 327.08 | 84.33 | 9.91 |
| Particulars | Senores Pharmaceuticals Limited | Ajanta Pharma Limited | Alembic Pharmaceuticals Limited | Caplin Point Laboratories Limited | Gland Pharma Limited | Strides Pharma Science Limited |
| Revenue from Operations | 2145.24 | 42087.1 | 62286.3 | 16941 | 56647.22 | 40511.24 |
| EBITDA Margin | 20.70% | 29.86% | 15.42% | 36.52% | 26.54% | 10.32% |
| PAT Margin | 15.25% | 19.39% | 9.89% | 27.24% | 13.64% | -2.33% |
| Return on Capital Employed | 11.73% | 32.22% | 13.42% | 26.55% | 13.63% | 4.19% |
| Return on Equity | 23.60% | 23.47% | 13.40% | 21.69% | 9.26% | -4.44% |
| Debt to Equity | 1.07 | 0 | 0.09 | 0 | 0.04 | 1.17 |
Senores Pharmaceuticals Limited Promoters & Shareholding
There are two promoter of the company i.e. Swapnil Jatinbhai Shah and Ashok kumar Vijaysinh Barot. The promoters as per DRHP cumulatively hold 7,781,311 equity shares, representing 23.39% of the paid-up equity share of company.
| Name of the Shareholder | Number of Equity Shares held | Percentage of the pre- Offer paid-up Equity Share capital (%) | Number of Offered Shares |
| Promoters | |||
| Ashokkumar Vijaysinh Barot | 3977780 | 11.96 | 550000 |
| Swapnil Jatinbhai Shah | 3803531 | 11.43 | 850000 |
| Total | 7781311 | 23.39 | |
| Selling Shareholders | |||
| Prakash M Sanghvi | 1476190 | 4.44 | 1000000 |
| Total | 1476190 | 4.44 | |
| Promoter Group | |||
| Anar Swapnil Shah (held jointly
with Swapnil Jatinbhai Shah) |
2294500 | 6.9 | |
| Pinkyben Jatinbhai Shah (held jointly
with Jatin Siddharth Shah) |
30500 | 0.09 | |
| Sangeeta Mukur Barot | 1342955 | 4.04 | 300000 |
| Shantaben Babulal Sanghvi (95,269 Eq.
Shares held jointly with Babulal Misrimal Sanghvi and Prakash M Sanghvi) |
328569 | 0.99 | |
| Dhananjay Ashokkumar Barot | 330000 | 0.99 | |
| Aviraj Group LLC | 684750 | 2.06 | |
| Aviraj Overseas LLC | 1895190 | 5.7 | |
| Renosen Pharmaceuticals Private Limited | 2694219 | 8.1 | |
| Espee Therapeutics LLP | 495000 | 1.49 | |
| Mukurdhvaj Yogeshkumar Barot | 456825 | 1.37 | |
| Jitendra Babulal Sanghvi (held jointly with Babulal Misrimal Sanghvi
and Prakash M Sanghvi) |
488516 | 1.47 | |
| Remus Pharmaceuticals Limited | 3261744 | 9.81 | |
| Hemant Ishwarlal Modi (held jointly with Sonal Hemantbhai Modi | 62000 | 0.19 | |
| Jatin Siddharth Shah (held jointly with Pinky Jatin Shah) | 30000 | 0.09 | |
| Total | 14394768 | 43.27 | |
| Grand total | 23652269 | 71.1 | |
Should You Subscribe to Senores Pharmaceuticals Limited IPO or Not
While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.
Competitive Strengths of Senores Pharmaceuticals Limited:
Niche product portfolio
The company's product selection strategy for Regulated Markets focuses on specialty, niche, and difficult-to-manufacture complex products with market potential in small to mid-market ranges. These products offer advantages such as lower price erosion, stable pricing, and higher market share. The company uses a product identification strategy, analyzing data from databases, government sourcing, and molecular application trends.
As of May 31, 2024, the company has 19 ANDAs approved by the US FDA and commercialized 21 products in the US and Canada markets. Four of the 19 ANDAs are CGT-designated products, which have an exclusivity period of six months, allowing the company to establish a foothold in the market and generate revenue without immediate competition.
Long-term marketing arrangements
The company has entered into long-term marketing agreements with major generic pharmaceutical and marketing companies in regulated markets for 5-7 years. These agreements allow for product development, in-licensing, and manufacturing at the company's Atlanta facility.
The company has well-established CDMO relationships with partners like Mint Pharmaceuticals, Ambicare Pharmaceuticals, etc. Company's relationship with key customers is based on factors such as quality, R&D, manufacturing capabilities, consistency of supply, and competitive pricing. The company aims to maintain relationships with top pharmaceutical customers, build a customer base, and strengthen its product basket.
Companies presence in the Emerging Markets
The corporation is a prominent player in emerging markets, with a focus on the Middle East, Africa, South East Asia, and Latin America. They manufacture a variety of products from their Chhatral Facility, like tablets, capsules, liquids, dried syrups, ORS, and injectables, to serve emerging markets clients.
The company has received approval from regulatory authorities in ten countries. In Fiscal 2024, the company's revenue from the EM business accounted for 20.60% of its total revenue, with a product portfolio of 182 products and combination molecules as of May 31, 2024.
Strong R&D capabilities
They have dedicated R&D units in India for pharmaceutical products and APIs. The company employs 51 people in their R&D team, including two doctoral members. The company identifies niche products based on public databases and internal research to identify product opportunities in the US market. They undertake formulation development, including R&D, bioequivalence studies, stability studies, and technical support services. They have a formulation development laboratory at their Atlanta Facility and a back-end R&D in India.
Future prospects
As of 2024 data, US market remains dominant from revenue prospective and is further expected to remain dominant in the future. The company plans to enhance its market presence in North America and other regulated markets, with plans to develop its own and acquire ANDAs to reduce time to market. The company is also focusing on expanding its Atlanta facility and establishing a niche injectables manufacturing facility. Additionally, the company plans to enter the US market for generic products with potential New Drug Applications (NDA) approval.
The company also plans to expand into new Regulated and Emerging Markets, leveraging its experience and niche product portfolio to meet diverse customer needs. The company also plans to establish facilities in emerging markets and expand its reach in semi-regulated markets.
The company is focusing on enhancing its capabilities for backward integration by establishing a subsidiary, RLSPL, to manufacture APIs. The company plans to expand its API capacities in India, catering to domestic markets and SAARC countries. They are also pursuing strategic acquisitions to expand their product portfolio and reach new markets.
Risk Factors of Senores Pharmaceuticals Limited:
Dependent on third party for sale of products
The company's business is dependent on the growth of regulated markets in the US, Canada, Europe, and EM markets. If market growth de-accelerates, competitors' products increase, the company's business, its operations, companies financial, and cash flows could be adversely affected. The company enters long-term marketing agreements with marketing partners, which result in predictable and stable cash flows. However, there is no assurance that these agreements will not decline due to increased competition, pricing pressures, or fluctuation in demand or supply.
| Business Segment | FY24 | FY23 | FY22 |
| Regulated Markets Business | 67.66% | 58.69% | 6.26% |
| Emerging Markets Business | 20.60% | - | - |
| Critical Care Injectables Business | 2.66% | 4.83% | - |
| API Business | 6.48% | 5.60% | - |
| Other Operational income | 2.59% | 30.89% | 93.74% |
Strict quality standards
Products manufactured and the manufacturing process is subject to stringent quality standards and specifications, typically specified by clients through agreements. Any deviation from these standards or failure to comply with technical specifications may lead to product recalls or cancellations of orders. The company is required to inform or obtain prior consent from some customers for any changes in product specifications, manufacturing process or method. Failure to maintain strict standards may result in cancellation of orders, loss of customers, loss of reputation and goodwill of the company, claims, monetary liability.
Their clients reserve the right to audit the manufacturing facilities, processes, or systems. The company is responsible for procuring raw materials, incorporating customer suggestions, and maintaining adequate product liability insurance.
Revenue concentration from clients
As can be from the data presented in the table below, the company's relied on a limited number of customers for a significant portion of its revenue. Although the company has increased its revenue and managed to bring down revenue concentration of top client, but it still remain significant higher. Losing its top clients or experiencing a decrease in business due to any adverse market conditions can lead to bit hit on financial statement of company. Additionally, the company may be required to offer terms that may restrain resources to retain existing customers.
| Customers | FY24 | FY23 | FY22 |
| As a % of revenue from operations | |||
| Largest customer | 27.53% | 32.14% | 55.74% |
| Top five customers | 59.97% | 82.45% | 99.28% |
| Top ten customers | 78.12% | 92.85% | 100% |
Extensive regulation
The pharmaceutical industry is highly regulated, with various local, state, provincial, and national authorities requiring compliance with various regulations. As the company expands its operations, it may face more complex and newer regulatory requirements and legal risks. These requirements impact various aspects of operations, including manufacturing, developing, storage, distribution, import and export, and record keeping. Failure to comply could lead to remedial actions, production stoppages, or facility closures, disrupting the manufacturing process and supply of products to customers.
Revenue concentration from US
The company has historically derived a significant portion of its revenue from the United States. However, potential declines in US revenues due to increased competition, regulatory action, pricing pressures, fluctuations in demand could negatively impact the company's business, and financial condition. International operations are also subject to risks, including compliance with foreign laws, regulations, and policies, which could lead to penalties and regulatory actions.
| Countries | FY24 | FY23 | FY22 |
| United States | 66.63% | 74.56% | 6.26% |
Capacity utilization
The company's future capacity utilization rates depend on factors like raw material availability, product demand, customer preferences, inventory management, and growth strategies. Non-materialization of estimates could negatively impact financial performance. The company plans to establish a US niche sterile injectables manufacturing facility and a new greenfield formulation facility in India. Under-utilization of existing and proposed manufacturing capacities could negatively impact business, growth prospects, and financial performance. Multi-product manufacturing plants require government permits and customer pre-qualifications, leading to delays in production ramping and utilization rates.
| Category | FY24 | FY23 | FY22 |
| Atlanta Facility | |||
| Capsule Total | 27.15% | 20.42% | 14.69% |
| Tablet Total | 19.31% | 25.54% | 14.15% |
| Total | 21.07% | 23.67% | 14.25% |
| Chhatral Facility | |||
| A. General Oral Dosage | |||
| Tablets | 65.95% | 69.95% | 59.94% |
| Capsules | 77.56% | 80.77% | 67.95% |
| Liquids | 17.64% | 29.94% | 25.73% |
| Dry Syrups | 16.05% | 11.19% | 13.78% |
| ORS | 7.41^ | 4.81% | 5.53% |
| B. Injectables | |||
| Dry powder injections | 10.31% | 2.62% | 6.45% |
| Ampoules | 18.55% | 4.10% | 40.48% |
| Vials | 11.64% | 4.10% | 0.69% |
| Lyophilized injection (Under Installation) | N.A. | N.A. | N.A. |
| C. Beta Lactum Oral Dosage Form | |||
| Capsules | 74.36% | 80.77% | 51.92% |
| Tablets | 9.63^ | 9.15% | 6.03% |
| Dry Syrups | 9.23% | 7.85% | 8.93% |
| Total | 57.39% | 60.35% | 48.07% |
| Naroda Facility | |||
| API | 75.10% | 59.72% | 67.76% |
Ability to develop and commercialize new product
The success of the company depends on its ability to develop and commercialize new formulations, which involves testing, manufacturing, and obtaining regulatory approvals while adhering to safety standards. The development and commercialization process is time-consuming and costly, with uncertain outcomes. The company invests heavily in R&D activities, employing 51 personnel as of March 31, 2024. However, the company cannot guarantee that these activities will yield innovations or increase revenues.
The company's manufacturing and research and development facilities are subject to risks such as equipment breakdowns, industrial accidents, severe weather conditions, and natural disasters. The company has two manufacturing facilities in India and one in the US, and its ability to manage these facilities is dependent on its ability to respond to these risks.
| Particulars | FY24 | FY23 | FY22 |
| R&D Investment* | 33.25% | 110.40% | 35.30% |
Senores Pharmaceuticals Limited Grey Market premium
Grey market premium is the premium quoted over the IPO issue price. GMP shows that investors are ready to pay above the upper band of the IPO issue price. GMP is determined in the grey market as per the demand and supply of the shares in the primary market. A grey market is that unofficial ecosystem of unlisted companies' stocks that start trading even before the launch of the IPO to the date of its listing.
Also Read: What is Grey Market Premium in IPO: How is GMP Calculated & Reliable
However, GMP is not a reliable factor, as it keeps fluctuating as per the demand and supply of shares in the primary market. There are numerous factors that affect the stock market in India and individual stock prices of different companies that are already listed and trading in the secondary market. However, for an IPO-bounded company, you can consider the GMP as the speculative listing price of the share
According to various online sources, the Grey Market Premium or GMP of the Senores Pharmaceuticals Limited is trading around Rs XX in the grey market. It means shares are trading at the upper band issue price of Rs XX with a premium in the grey market and may list around the same price.
