Allchem Lifescience Files IPO Papers with SEBI, Plans to Raise INR 190 Cr

The proposed IPO includes a fresh issue of equity shares worth INR 190 Cr and an offer-for-sale (OFS) of 71.55 lakh equity shares by promoters.

Gujarat-based pharmaceutical company Allchem Lifescience has submitted its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI), seeking approval for its initial public offering (IPO). 

The proposed IPO includes a fresh issue of equity shares worth INR 190 Cr and an offer-for-sale (OFS) of 71.55 lakh equity shares by promoters.

According to the DRHP, Kantilal Ramanlal Patel and Manisha Bipin Patel, currently part of the promoter group, will offload share through the OFS. 

At present, promoters and promoter group entities hold 100% of the company’s stake.

IPO Proceeds Allocated for Debt Payment

Allchem Lifescience plans to utilize INR 130 Cr from the fresh issue towards debt repayment, while the remaining amount will be directed toward general corporate purposes and business expansion.

Founded in 2017, the company specializes in manufacturing active pharmaceutical ingredient (API) intermediates and specialty chemicals. It particularly focuses on piperazine derivatives, which are essential raw materials in the production of APIs like quetiapine, a key drug for schizophrenia and bipolar disorder.

Manufacturing & Market Presence

The company operates a manufacturing facility in Vadodara, Gujarat, supplying 263 products to both domestic and international pharmaceutical companies. As of December 2024, Allchem Lifescience had 148 customers across 13 Indian states and 66 customers in 22 countries.

Notable clients include Alembic Pharmaceuticals, Indoco Remedies, Micro Labs, MSN Laboratories, Neogen Chemicals, and Unichem Laboratories. The company has positioned itself as a key supplier of import-substituting pharmaceutical ingredients that are otherwise difficult to source domestically.

Financial Performance

Allchem Lifescience reported a compound annual growth rate (CAGR) of 12.75% in revenue from FY22 to FY24. For the six months ending September 30, 2024, revenue from operations stood at INR 7.84 Cr. 

The company's profit after tax (PAT) has grown at a CAGR of 28.65% between March 2022 and March 2024, with a PAT of INR 1.09 Cr recorded in the first half of FY24.

The IPO is being managed by Emkay Global Financial Services as the sole book-running lead manager.