Accretion Pharmaceuticals Ltd IPO: A Deep Dive for Potential Investors
The Indian pharmaceutical sector continues to be a vibrant space for investment, and the upcoming Initial Public Offering (IPO) of Accretion Pharmaceuticals Limited is garnering attention. This blog post offers a comprehensive analysis of the company, its IPO, financial health, and the broader industry landscape to help you make an informed decision.
Understanding Accretion Pharmaceuticals Ltd.
Founded in 2012 and headquartered in Sanand, Gujarat, Accretion Pharmaceuticals Limited has carved a niche in the manufacturing and marketing of a diverse range of pharmaceutical formulations. Their product portfolio is extensive, encompassing:
- Tablets
- Capsules
- Oral Liquids
- Ointments and Creams
- Gels
- Powders, and more.
Beyond its own branded products, Accretion Pharmaceuticals also provides contract manufacturing services, catering to the needs of other pharmaceutical players. This diversification in its operational model adds a layer of stability and growth potential.
A testament to their commitment to quality and operational excellence, the company holds several prestigious certifications:
- ISO 9001:2015 (Quality Management System)
- ISO 14001:2015 (Environmental Management System)
- ISO 22000:2005 (Food Safety Management System - often relevant for certain excipients or nutraceutical lines)
Accretion Pharmaceuticals has successfully expanded its footprint beyond Indian borders, establishing a market presence in over 20 countries across Africa, Southeast Asia, and the Middle East. This global reach underscores its capacity to meet international quality standards and navigate diverse regulatory environments.
Accretion Pharmaceuticals IPO: Essential Information
Investors keen on participating in Accretion Pharmaceuticals' growth story should be aware of the key details of its upcoming IPO:
Offer Highlights
| Particulars | Details |
|---|---|
| IPO Price Range | ₹96 to ₹101 per share |
| Total IPO Size | ₹29.75 Crore |
| Issue Type | Fresh Issue of ₹29.75 Crore (No Offer For Sale component) |
| Listing Exchange | NSE SME |
| Minimum Lot Size (Shares) | 1200 shares |
| Minimum Investment (Retail) | ₹115,200 (at the lower price band) to ₹121,200 (at the upper price band) |
| Minimum Lot Size (HNI) | 2 lots (2400 shares) |
| Minimum Investment (HNI) | ₹230,400 (at the lower price band) to ₹242,400 (at the upper price band) |
Purpose of the Public Offering
Accretion Pharmaceuticals intends to utilize the net proceeds from the IPO for the following strategic initiatives:
- Purchase of Machinery and Equipment: To enhance production capabilities and efficiency.
- Capital Expenditure for Upgrading Existing Manufacturing Facilities: Modernization and expansion of current infrastructure.
- Funding Working Capital Requirements: To support day-to-day operations and business growth.
- Repayment/Prepayment of Certain Borrowings: To strengthen the balance sheet by reducing debt.
- General Corporate Purposes: For other operational and strategic needs of the company.
A Glance at the Company's Financial Performance
The financial trajectory of Accretion Pharmaceuticals indicates significant growth, particularly in the most recent fiscal year. Understanding these numbers is crucial for assessing the company's valuation and future prospects.
Profit and Loss Statement (Figures in ₹ Crores)
| Particulars | FY22 | FY23 | FY24 |
|---|---|---|---|
| Revenue from Operations | 22.58 | 29.53 | 33.94 |
| EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) | 1.93 | 2.14 | 7.76 |
| PAT (Profit After Tax) | 0.08 | 0.10 | 3.88 |
Balance Sheet Highlights (Figures in ₹ Crores)
| Particulars | FY22 | FY23 | FY24 |
|---|---|---|---|
| Total Assets | 17.74 | 20.58 | 27.05 |
| Share Capital | 3.08 | 3.84 | 4.00 |
| Total Borrowings | 7.61 | 8.47 | 13.48 |
The substantial jump in PAT from ₹0.10 Crore in FY23 to ₹3.88 Crore in FY24 is a key highlight, suggesting improved profitability and operational efficiency.
Strategic Analysis: Advantages and Growth Avenues
Every investment comes with its own set of positives and areas to watch. Here's a look at Accretion Pharmaceuticals:
Key Strengths
- Experienced promoters with deep industry knowledge.
- Strong relationships with clients and suppliers.
- Focused on manufacturing high-quality pharmaceutical products.
- Certified for quality (ISO 9001), environmental (ISO 14001), and food safety (ISO 22000) management systems.
- Established international presence contributing to revenue diversification.
Growth Prospects
- Expanding presence in emerging global pharmaceutical markets.
- Rising demand for reliable contract manufacturing services.
- Potential to introduce new healthcare products and diversify portfolio.
- Increasing global focus on affordable generic medicines.
- Utilizing IPO funds for capacity expansion and facility upgrades.
Considerations and Market Dynamics
Potential Challenges
- Operations are currently dependent on a single manufacturing facility, which could pose concentration risk.
- Exposure to ongoing legal and regulatory proceedings, common in the pharma sector.
- High compliance burden, particularly in international markets with varying regulations.
- Limited diversification in manufacturing locations.
Industry-Specific Risks
- Geopolitical risks and economic instability in export markets.
- Non-compliance with stringent pharmaceutical regulations could lead to legal or regulatory actions.
- Currency exchange rate volatility impacting export earnings.
- Regional disruptions (e.g., supply chain issues, local disturbances) may affect manufacturing continuity.
Leadership and Promoter Background
The company is spearheaded by Mr. Vivek Patel as the Managing Director, who brings valuable experience to the table. The promoters' collective expertise in the pharmaceutical domain is a significant asset. For specific details on promoter shareholding pre and post-IPO, investors should refer to the Red Herring Prospectus (RHP).
Why Evaluate the Accretion Pharmaceuticals IPO?
Several factors make this IPO worth considering for investors with an appetite for SME stocks:
- Impressive Financial Growth: The PAT surged impressively to ₹3.88 Crore in FY24 from ₹0.10 Crore in FY23, showcasing robust performance.
- Global Footprint & Certifications: Presence in over 20 countries and key ISO certifications reflect quality commitment and market acceptance.
- Promising Industry Outlook: The Indian pharmaceutical industry is on a growth trajectory, projected to reach approximately $130 billion by 2030. Accretion is well-positioned to benefit from this expansion.
- Strategic Use of IPO Proceeds: Funds are earmarked for capacity upgrades, machinery purchase, working capital, and debt reduction, which can fuel future growth.
The Indian Pharmaceutical Landscape: A Thriving Ecosystem
The Indian pharmaceutical sector is a global powerhouse, and understanding its dynamics provides context for Accretion's potential:
- India ranks third globally in pharmaceutical production by volume and boasts over 10,500 manufacturing units.
- The nation is a critical supplier, providing approximately 40% of generic medicines to the U.S., 25% of all medicines to the U.K., and meeting 50% of the global demand for various vaccines.
- The industry is progressively shifting towards innovative therapies, biosimilars, and biologics, which are expected to drive future growth.
- As mentioned, the Indian pharmaceutical market is projected to reach $130 billion by 2030, driven by rising domestic and global demand.
How to Apply for the Accretion Pharmaceuticals IPO?
If you're interested in applying for the Accretion Pharmaceuticals IPO, you would typically follow these general steps through your brokerage account:
- Ensure your Demat and trading account is active and KYC compliant.
- Log in to your stockbroker's online platform (website or mobile app) during the IPO bidding window.
- Navigate to the IPO section and select "Accretion Pharmaceuticals Ltd IPO."
- Enter the number of lots you wish to apply for and the price per share (within the price band if it's a book-built issue, or at the fixed price). For SME IPOs, applications are typically at the cut-off price.
- Enter your UPI ID linked to your bank account.
- Submit your application. You will receive a mandate request on your UPI app.
- Approve the mandate on your UPI app to block the funds. The amount will be debited only if shares are allotted.
It is advisable to apply early and ensure sufficient funds are available in your bank account linked to the UPI ID.
Key Contacts for the IPO
For further details or specific queries, you can reach out to the concerned parties:
Company Information
| Company Name | Accretion Pharmaceuticals Limited |
| Address | 29 Xcelon Ind Park 1, B/h, Intas Pharmaceuticals, Vasna Chacharvad, Sanand, Gujarat |
| Phone | +91-97148 82929 |
| compliance@accretionpharma.com | |
| Website | https://accretionpharma.com/ |
IPO Registrar
| Registrar Name | Kfin Technologies Limited |
| Phone | 04067162222, 04079611000 |
| apl.ipo@kfintech.com | |
| Website | https://kosmic.kfintech.com/ipostatus/ |
Lead Manager to the Issue
| Lead Manager Name | Jawa Capital Services Private Limited |
| RHP Link (Reference) | (Refer to SEBI or Exchange websites for the official RHP) |
Final Thoughts
The Accretion Pharmaceuticals Ltd IPO presents an opportunity to invest in a growing company within a resilient and expanding pharmaceutical sector. Its strong financial turnaround in FY24, international presence, and clear objectives for fund utilization are positive indicators. However, as with any SME IPO, investors should carefully consider the risks associated with smaller companies, market volatility, and the specific challenges outlined. Thoroughly reading the Red Herring Prospectus (RHP) and consulting with a financial advisor is highly recommended before making any investment decisions.
Disclaimer: This blog post is for informational purposes only and should not be construed as financial advice or a recommendation to invest in the IPO. Investment in equity shares and IPOs involves risks, including the risk of loss of principal. Please conduct your own due diligence and consult with a qualified financial advisor before making any investment decisions. The financial data and IPO details are based on information available as of the "Last Updated" date mentioned in the source data (12 May 2025) and are subject to change.