Hindustan Laboratories has received SEBI approval for its IPO comprising fresh issue and OFS. Here are the issue details, proceeds utilisation, BRLM and key risks investors should track.

Hindustan Laboratories gets SEBI nod for IPO: Issue size, objective, key risks explained

Hindustan Laboratories IPO details

The IPO is a book-build issue of 1.41 crore equity shares with a face value of Rs 10 each. Through the fresh proceeds the company aims to meet its general capital requirements.

Here are three major factors you need to know about the issue:

Hindustan Laboratories IPO: Issue Size and BRLM

The offer comprises 1.41 crore equity shares of Rs 10 each, consisting 50 lakh fresh equity shares, while company’s promoter Rajesh Vasantray Doshi will offload 91 lakh equity shares of Rs 10 each.

The total amount to be raised via the IPO has not been disclosed yet. The book-running lead manager for the issue is Choice Capital Advisor, while MUFG Intime India is the registrar to the issue.

Key details like share price band, offer size, listing dates have not been announced yet.

Hindustan Laboratories IPO: Utilization of Proceeds

According to its DRHP, Hindustan Laboratories will deploy the net proceeds worth Rs 72.5 crore for funding its working capital requirements. While the remaining portion will be utilised for general corporate purposes.

The company has said it may revise its funding requirements and deployment schedule based on a bunch of internal and external market conditions including business and strategy variations, control of management etc.

Only the capital raised via fresh equity will form part of net proceeds.

Hindustan Laboratories IPO: Key Risk

The pharma company is engaged in the business of manufacturing generic medicines for various entities at a large scale. The highly competitive Indian pharmaceutical market makes its offer vulnerable to several risks, this includes: risk of equipment failure, risk of heavy reliance on government tenders.

Also the company’s high dependency on its top 10 clients for revenue generation, failure to comply with quality requirements, related party transactions, inability to generate sufficient cash flows, are some risks which should be monitored.