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Corona Remedies Limited, a leading pharmaceutical company, has officially filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), marking an important step towards becoming a publicly traded company. The company is planning an Initial Public Offering (IPO) to raise up to ₹800 crore.
What is an Offer for Sale (OFS)?
Unlike many IPOs that issue new shares to raise funds for the company’s growth, Corona Remedies’ IPO is structured as an Offer for Sale (OFS). This means that existing shareholders, including the promoter group and current investors, will be selling their shares. The promoter group, led by Dr. Kirtikumar Laxmidas Mehta, and ChrysCapital, a major investor, will be among those selling their shares. Specifically, Sepia Investments, Anchor Partners, and Sage Investment Trust will also participate in the OFS. ChrysCapital currently holds 27.5% of the company’s shares.
About Corona Remedies
Based in Ahmedabad, Corona Remedies is a well-established pharmaceutical company. It is involved in developing, manufacturing, and marketing a wide range of products across different therapeutic segments. The company’s portfolio includes 67 brands, which focus on important areas such as:
- Women’s health
- Cardiovascular and diabetes care
- Pain management
- Urology
As of December 31, 2024, these therapeutic segments form a significant part of Corona Remedies’ offerings in the Indian market.
Strong Market Growth and Financial Performance
Corona Remedies has been experiencing impressive growth, particularly in the Indian pharmaceutical market. According to a report by CRISIL, the company was ranked as the second fastest-growing company among the top 30 firms in India’s Pharmaceutical Market based on sales performance. For the fiscal year ending March 31, 2024, the company reported ₹1,014.5 crore in revenue.
A large portion of the company’s revenue, about 96%, comes from domestic sales within India, which has helped establish a solid financial foundation. This strong focus on the Indian market provides stability, which is vital as the company looks to attract public investment.
Manufacturing Facility and Export-Oriented Operations
Corona Remedies operates a large manufacturing facility located in Bhayla, Gujarat. This facility boasts over 90% capacity utilization for producing tablets and capsules, as of the nine months ending December 31, 2024. High capacity utilization indicates the company’s operational efficiency and suggests it has the potential to expand its production even further after the IPO.
The company also benefits from operating under the Export Oriented Units (EOU) framework. This allows Corona Remedies to export its entire production, with only a limited portion sold domestically. It also enables the company to import raw materials for production without paying duties, making production more cost-effective.
Details of the IPO and Investor Reservations
The ₹800 crore IPO will have specific reservations for different types of investors:
- 75% of the shares are reserved for Qualified Institutional Bidders (QIBs).
- 15% will be allocated to Non-Institutional Investors (NIIs).
- 10% of the shares are set aside for Retail Investors.
The book running lead managers (BRLMs) managing the IPO are JM Financial, IIFL Capital Services, and Kotak Mahindra Capital Company. Additionally, Bigshare Services will serve as the registrar for the IPO. Once listed, the shares of Corona Remedies are expected to be available for trading on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
