Ahmedabad-based Senores Pharma to use ₹107 cr from IPO proceeds for new unit in United States
Senores Pharmaceuticals, an Ahmedabad-based entity engaged in development and manufacture of generic pharmaceutical products, plans to invest a portion of the proceeds from ₹582 crore Initial Public Offering (IPO) for setting up a manufacturing facility for sterile injections at Atlanta in the United States.
The company incorporated in the year 2017 plans to invest ₹107 crore from the IPO proceeds to one of its subsidiaries, Havix, to fund capital expenditure requirements for setting up a sterile injections facility at the company’s existing campus at Atlanta. “Currently we manufacture oral solids in the US. At the same location we are putting up an injectable unit as a second vertical,” Swapnil Shah, CEO and MD of the company told the businessline.
Inorganic acquisitions
Senores caters to regulated markets in US, Canada and United Kingdom through the Atlanta facility which was set up in 2018. “We have also planned some inorganic acquisitions in the US,” Shah said, adding that the company’s revenue from operations stood at ₹183 crore in the first half of the current financial year. “About 70 percent of the revenues come from the US, while 30 percent comes from emerging markets in India,” he added. The Ahmedabad-based company’s IPO is a combination of fresh issuance of shares worth ₹500 crore and an offer for sale of up to 21 lakh shares valued at ₹82.11 crore, by promoters and other selling shareholders, at the upper end of the price band.
“We now intend to expand operations in our Atlanta facility in the US to carry out manufacturing and marketing of high value-added injectables for the US market to cater to the regulated markets. Our company expects to benefit from such investment in Havix as we believe our expansion plans and strategy will allow us to expand our capability to offer new dosage formats and enhance our capability to meet the growing demand for niche injectables. The proposed expansion will leverage technology and quality control to produce injectables, allowing us to expand our product portfolio,” the company stated in its prospectus.
The proposed new unit is expected to be commissioned in the fourth quarter of financial year 2026. The company also proposes to utilise ₹13.9 crore and ₹29.3 crore from the proceeds to fund the incremental working capital requirement in the financial years 2025 and 2026. “Our company manufactures APIs through its Naroda Facility and is in the process of setting up a new greenfield unit for the manufacture of APIs at Chhatral, Gujarat. The greenfield expansion will enhance the revenue and consequently increase the working capital requirement. The working capital will be required for managing the inventories, extending credit to customers, giving advance to suppliers, meeting stringent regulatory requirements, all while ensuring that the company can seize growth opportunities and mitigate risks effectively,” the company stated in the prospectus.
The company also proposes to utilise an estimated ₹100 crore from the IPO proceeds towards repayment of all or a portion of its debt.