Zenith Drugs IPO - Review & Fundamental Analysis
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Zenith Drugs IPO

Zenith Drugs IPO consists of a fresh issue of 51,48,800 shares aggregating to INR 40.68 crores. The company plans to utilize net proceeds for new unit machinery, block upgrades, working capital, and general purposes. 

Zenith Drugs Limited IPO  – Important Details 

Zenith Drugs IPO DateFebruary 19, 2024 to February 22, 2024
Zenith Drugs IPO Listing DateFebruary 27, 2024
Zenith Drugs IPO PriceINR 75-79 per share
Zenith Drugs IPO Lot Size1600 Shares
Zenith Drugs IPO Total Issue SizeINR 40.68 crores
Zenith Drugs IPO Basis of AllotmentFebruary 23, 2024
Zenith Drugs IPO Initiation of RefundsFebruary 26, 2024
Zenith Drugs IPO Credit of Shares to DematFebruary 26, 2024
Zenith Drugs IPO Issue TypeBook Built Issue
Zenith Drugs IPO Listing AtNSE SME

Zenith Drugs Ltd IPO – Company Profile

Zenith Drugs, based in Indore, specializes in high-quality, affordable medicines focusing on generics. Committed to excellence, they prioritize technology, service, and growth to become a premier pharmaceutical company globally. 

They proudly maintain WHO-GMP compliance and hold ISO 9001:2015 certification. Offering diverse formulations, including ORS powder, liquid orals, ointments, and capsules, they ensure efficacy, safety, and affordability for accessible healthcare. 

They expanded its facility twice to meet rising product demand, enhancing production capacity and introducing new formulations. With strategic investments, the company aims for continuous improvement to meet healthcare needs. 

Zenith Drugs IPO – Fundamental Analysis

Zenith Drugs Limited’s IPO financials reveal a company on a growth trajectory, with consistent revenue increases, significant profit growth, and strong equity expansion, making it an appealing investment in the pharmaceutical sector with promising future prospects.

Revenue Growth:

The company has shown steady revenue growth from ₹7,340.17 lakhs in 2021 to ₹11,451.91 lakhs in 2023, indicating an increasing demand for its products and a positive market presence.

Equity Expansion:

Equity has nearly doubled from ₹895.27 lakhs in 2021 to ₹1,725.87 lakhs in 2023, reflecting investor confidence and potentially successful reinvestment strategies to support growth.

Profitability:

Profit after tax has increased from ₹302.92 lakhs in 2021 to ₹515.33 lakhs in 2023, showcasing the company’s ability to enhance its profitability and growth.

Return on Net Worth (RoNW):

The RoNW has fluctuated but remains high at 29.88% in 2023, indicating the company’s efficiency in generating profits from shareholders’ equity.

Diluted EPS:

The Diluted EPS has seen a significant increase, from ₹75.73 in 2021 to ₹128.82 in 2023, highlighting the company’s growing earnings power per share.

Asset and Liability Management:

Total assets have more than doubled, suggesting significant investment in the company’s growth and operational capacity. Liabilities have also increased but are proportional to the assets, indicating manageable debt levels.

NAV per Equity Share:

The NAV per equity share has nearly doubled, from ₹7.46 in 2021 to ₹14.37 in 2023, reflecting the growing intrinsic value of the company’s shares.

Zenith Drugs Limited IPO Financial Information 

ParticularAs of 31 March 2021As of 31 March 2022As of 31 March 2023
Revenue (₹ in lakhs)7,340.179,165.5011,451.91
Equity (₹ in lakhs)895.271,210.581,725.87
Expenses (₹ in lakhs)6,891.368,826.0410,848.62
Profit and Loss After Tax (₹ in lakhs)302.92313.82515.33
RoNW (%)33.8425.9629.88
Diluted EPS only (₹)75.7378.22128.82
NAV per Equity Share (₹)7.4610.0814.37
Total Assets (in lakhs)4,654.706,858.479,793.83
Total Liabilities (in lakhs) 3,759.435,647.898,067.96

Zenith Drugs Limited IPO Peer Comparison 

Zenith Drugs Limited demonstrates a competitive edge with a high RoNW of 29.88% and an EPS of ₹4.29, showcasing its profitability and operational efficiency compared to peers like Sudarshan Pharma Industries and Sigachi Industries, despite not disclosing its P/E ratio.

CompanyRevenue (₹ in lakhs)Face Value per Equity Share (₹)P/E Ratio (Times)EPS (₹)RoNW (%)NAV per Equity Share (Basic) (₹)
Zenith Drugs Limited11,451.9110NA4.2929.8814.37
Sudarshan Pharma Industries Limited19,170.001041.115.4813.07NA
Sigachi Industries Limited9,444.001028.6413.5218.75NA

Zenith Drugs Ltd IPO Objective

The main objective of Zenith Drugs is to purchase machinery and equipment, manufacture block upgradation, and meet its working capital requirements. 

  1. Purchase of Machinery & Equipment for Setting up New Unit: The company intends to deploy INR 1,074.82 lakhs to purchase plant, machinery, and equipment. The company is expanding its factory with shed construction, funded by internal accruals, borrowings, and receivables. 
  1. Existing Manufacturing Block Upgradation: The company’s current factory, located at K.No 72/5, Village Muradpur, Tehsil-Depalpur, Indore, primarily houses a syrup plant and other manufactured pharmaceutical products. INR 210.59 lakhs will be invested in additional equipment to enhance quality and capacity. 
  1. To Meet Working Capital Requirements: The company plans to utilize INR 1,200 lakhs from the net proceeds of this issue to meet its projected working capital requirement of INR 4,532.73 lakhs for FY 2023-2024. 
  1. General Corporate Purposes: The Company plans to deploy the balance funds towards the general corporate goals, including but not restricted to strategic initiatives, partnerships, joint ventures and strategic entity/business acquisitions, branding, marketing, and new client referral fees meeting exigencies. 

Zenith Drugs IPO Risks And Challenges 

Zenith Drugs’ risk includes uncertainty from pending legal proceedings globally, potential adverse impacts on operations, and challenges in meeting demand or replacing API suppliers without long-term contracts. 

  • Pending legal proceedings across multiple jurisdictions poses uncertainty. Outcomes may impact business, operations, cash flow, and financial health unfavorably. No assurance of favorable rulings. Potential adverse effects acknowledged. 
  • Pharmaceutical manufacturers adhere to strict global regulations. Changes require approvals. Routine inspections occur, with potential enforcement for violations. Pending legal disputes pose business risks if outcomes are unfavorable. 
  • Their business heavily relies on API. Meeting increased demand or replacing suppliers may pose challenges. Lack of long-term contracts with suppliers could lead to shortages or quality issues, impacting their business. 

Zenith Drugs Ltd IPO – Industry & Market Potential 

The Indian pharmaceutical industry is a global leader in generic drugs and vaccines, with significant compliance with US FDA standards. It supplies much of worldwide demand and is poised for substantial growth. 

The Indian healthcare sector is projected to triple by 2022, reaching US$ 372 billion. Public healthcare spending increased to 2.2% of GDP. Health insurance premiums grew significantly. Medical tourism and e-health markets are expanding rapidly. 

India’s healthcare sector offers diverse opportunities across providers, payers, and medical technology. Rising health consciousness and government initiatives aim to elevate India as a global healthcare hub, increasing public health spending to 2.5% of GDP by 2025. 

Zenith Drugs Ltd IPO – Type of Offer 

Zenith Drugs will have a fresh issue of 51,48,800 shares. The company plans to utilize net proceeds for new unit machinery, block upgrades, working capital, and general purposes.

Zenith Drugs IPO Offer Size

Zenith Drugs’ offer size is INR 40.68 crores. The company plans to utilize net proceeds for new unit machinery, block upgrades, working capital, and general purposes.

Zenith Drugs IPO Allotment Structure

Zenith Drugs Limited’s IPO allotment structure includes a Retail Individual Investors (RII) category with investments below ₹2 lakhs, a category for other investors exceeding ₹2 lakhs, and a reservation of 8,52,800 shares for Market Makers.

  • Retail Individual Investors (RII): These individual investors apply for shares with a total value of less than Rs.2 lakhs.
  • Other than retail individual investors: Such applications where the value exceeds INR 2 lakhs.
  • Market Maker Reservation: A certain percentage or number of shares is reserved for market makers. The company has set aside 8,52,800 shares for this purpose.

How to apply for a Zenith Drugs IPO through Alice Blue?

To apply for the Zenith Drugs IPO through Alice Blue, you would typically follow these steps:

  1. Open a Demat and Trading Account: If you don’t have one already, you would need to open a Demat and trading account with Alice Blue.
  2. Check for IPO Details: Once your account is active, you can check for the Zenith Drugs IPO details in the IPO section of the Alice Blue platform.
  3. Place the Bid: Enter the number of shares you wish to buy and place your bid within the IPO’s price band.
  4. Submit the Application: Confirm all your details and submit your application.

 You can apply for the Zenith Drugs IPO at Alice Blue in just a few clicks!

 Check Allotment Status: Post the allotment process, you can check the allotment status to see if you have received any shares.

 Please note that the allotment of shares is not guaranteed and will depend on the demand for the IPO.

How to check Zenith Drugs IPO Allotment Status on Alice Blue?

Checking the allotment status of an IPO in Alice Blue is usually straightforward. Please follow these general steps:

 Log in to your Alice Blue Account: You can do this through the Alice Blue website or their trading app.

  1. Navigate to the Portfolio or IPO Section: This might differ based on the layout of Alice Blue’s platform, but generally, you can find the status of your IPO application under the ‘Portfolio’ or ‘IPO’ section.
  2. Find the IPO Allotment Status: Look for a sub-section called ‘IPO Allotment Status’ or something similar. This is where you can see