Ahmedabad-based Concord Biotech, one of the leading global developers and manufacturers of select fermentation-based APIs across immunosuppressants and oncology in terms of market share, based on volume in 2021 has filed its Draft Red Herring Prospectus (DRHP) with the markets regulator, Securities and Exchange Board of India (SEBI), to raise funds through an initial public offering (IPO).

The issue with a face value of Re 1 per equity share is a complete offer for sale (OFS) aggregating to 20,925,652 equity shares by Helix Investment Holdings. The offer also includes a reservation for a subscription by eligible employees.

The offer is being made through the Book Building Process, wherein not more than 50 per cent of the offer shall be available for allocation to Qualified Institutional Buyers, not less than 15 per cent of the offer shall be available for allocation to non-institutional bidders and not less than 35 per cent of the offer shall be available for allocation to retail individual bidders.

As per the F&S report stated in its DRHP, Concord Biotech commands a market share of over 20 per cent by volume in 2021 across identified fermentation-based API products including dactinomycin, sirolimus, tacrolimus, mycophenolate sodium, and cyclosporine. It supplies to over 70 countries including regulated markets such as the US, Europe, Japan, and India. 

The DRHP additionally states that fermentation is a challenging process as it involves working with microbial strains and culture, controlling multiple process parameters, and performing various purification steps. 

As of March 31, 2022, it had a portfolio of 56 brands and 65 products including 22 APIs and 43 formulations. In addition, it had 80 out-licensed formulations which they distributed in India under their brands. It has filed over 120 DMFs across several countries. 

The Ahmedabad-based biopharma firm is amongst the few globally that have successfully and sustainably established and scaled up its fermentation-based API manufacturing capabilities. It has three production sites in the state of Gujarat located out of Valthera, Dholka, and Limbasi having a total installed fermentation capacity of 1,250 m3. 

Some of Concord Biotech's API clients include Intas Pharmaceuticals Limited and Glenmark Pharmaceuticals Limited. As of March 31, 2022, it had over 200 customers and its ten largest clients had a relationship with them for an average of nine years in FY22. It plans to increase its wallet share from its existing API customers and pursue growth in formulations in India, Emerging Markets and the US.

The company’s revenue from operations increased by 15.56 per cent to Rs 712.93 crore for the Financial Year 2022 from Rs 616.94 crore for the Financial Year 2021, primarily due to an increase in the sales volume of its products to existing customers; sales to its new customers; and increase in prices of some of the products, which was partially offset by the decrease in prices of certain products, while profit for the financial year 2022 stood at Rs 174.93 crore.

Kotak Mahindra Capital Company, Citigroup Global Markets India, and Jefferies India are the book running lead managers and Link Intime India is the registrar to the offer. The equity shares are proposed to be listed on the BSE and the NSE.