Corona Remedies IPO review (Not Rated)

•    The company is engaged in the manufacturing and marketing of women’s healthcare, cardio-diabeto, pain management, and other therapeutic treatment areas.
•    It has a portfolio of specialized chronic pharma products that carries high margins.
•    The company marked steady growth in its top and bottom lines for the reported periods.
•    Based on its recent financial data, the issue appears fully priced.
•    Investors may lap it up for medium to long term.

ABOUT COMPANY:
Corona Remedies Ltd. (CRL) is an India-focused branded pharmaceutical formulation company engaged in developing, manufacturing and marketing products in women’s healthcare, cardio-diabeto, pain management, urology and other therapeutic areas. It is the fastest growing company among the top 30 companies in the Indian Pharmaceutical Market (“IPM”) in terms of domestic sales in the IPM. Further, according to the CRISIL Intelligence Report it is the second fastest growing company among the top 30 companies in the IPM in terms of domestic sales.  During this period, its domestic sales grew at a CAGR of 16.77%, displaying a growth of more than 1.82 times the IPM’s growth. 

This has been driven by CRL’s growth in volume (at an average of 5.70% over the above period. Its diversified product portfolio comprises 71 brands catering to a range of therapeutic areas such as women’s healthcare, cardio-diabeto, pain management, urology and others/multispecialty pharmaceuticals (comprising vitamins/minerals/nutrition (“VMN”), gastrointestinal and respiratory), as of June 30, 2025. It had an established track record of building and scaling brands, as is reflected in its core portfolio of 27 “engine” brands, which contributed to 72.34% of domestic sales during MAT June 2025. Its “engine” brands include market-leading brands such as Cor, Trazer, Cor9, B-29 and Myoril during MAT June 2025, through which it has been able to establish market presence and drive further growth across each of its focused therapeutic areas. 

According to the CRISIL Intelligence Report, trend in CORONA’s acute-chronic domestic sales, the chronic and sub-chronic segment constituted 70.10% of its domestic sales during MAT June 2025, with the acute segment constituting the remaining 29.90%. The company has a comprehensive product portfolio across the different stages in women’s healthcare, cardio-diabeto, pain management and urology, among other therapeutic areas.

CRL operates two manufacturing facilities, located in the states of Gujarat (the “Bhayla Manufacturing Facility”) and Himachal Pradesh (the “Solan Manufacturing Facility”) and are in the process of commissioning a hormone manufacturing facility in the state of Gujarat, which is expected to commence manufacturing operations during the first quarter of Financial Year 2027. As of June 30, 2025, its manufacturing facilities were spread over an aggregate of 2.83 hectares and had an aggregate installed capacity for formulations of 1,285.44 million units per annum, with a total of 11 production lines.

The company is also focused on executing strategic brand acquisitions and establishing in-licensing arrangements to address therapy gaps in its portfolio and to establish complementary capabilities, such as backward integration, marketing arrangements, and diversified product offerings. As of June 30, 2025, it had 761 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route secondary IPO worth Rs. 655.37 cr. (approx. 6171092 equity shares of Rs. 10 each at the upper cap). The company has announced a price band of Rs. 1008 – Rs. 1062 per equity shares of Rs. 10 each. The issue opens for subscription on December 08, 2025, and will close on December 10, 2025. The minimum application to be made is for 14 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE and NSE. The issue constitutes 10.09% of the post-IPO paid-up equity capital. This being a pure secondary issue, no funds are going to the company. This issue is being made for providing exit to some of its stakeholders and unlock the listing benefits. 

The company has reserved equity shares worth Rs. 5.85 cr. (approx. 55085 equity shares at the upper cap) for its eligible employees and offering them a discount of Rs. 54 per share. From the rest, it has allocated not more than 50% for QIBs, not less than 35% for Retail Investors, and not less than 15% for HNIs.

The three Book Running Lead Managers (BRLMs) to this issue are JM Financial Ltd., IIFL Capital Services Ltd., and Kotak Mahindra Capital Co. Ltd., while Bigshare Services Pvt.  Ltd., is the registrar to the issue. Kotak Securities Ltd., and JM Financial Services Ltd. are the syndicate members.

Having issued initial equity shares at par, the company has issued/converted further equity shares at a fixed price of Rs. 50 per share in October 2017. It has also issued bonus shares in the ratio of 1 for 2 in May 2010, 1 for 2 in March 2011, 1 for 1 in September 2011, and 10 for 1 in November 2021. The average cost of acquisition of shares by the promoters/selling stakeholders, Rs. 0.12, Rs. 0.13, Rs. 0.25, Rs. 0.29, Rs. 0.68, Rs. 2.56, and Rs. 408.76 per share.

Post-IPO, its current paid-up equity capital of Rs. 61.16 cr. will remain same as this is a pure Offer for Sale (OFS). Based on the upper cap of the IPO price band, the company is looking for a market cap of Rs. 6495.20 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has (on a consolidated basis) posted a total income/net profit, of Rs. 891.10 cr. / Rs. 84.93 cr. (FY23), Rs. 1020.93 cr. / Rs. 90.50 cr. (FY24), and Rs. 1202.35 cr. / Rs. 149.43 cr. (FY25). For Q1 of FY26 ended on June 30, 2025, it posted a net profit of Rs. 46.20 cr. on a total income of Rs. 348.56 cr. The company marked steady growth in its top and bottom lines for the reported periods. 

For the last three fiscals, the company has posted an average EPS of Rs. 19.58 and an average RoNW of 22.07 %. The issue is priced at a P/BV of 10.70 based on its NAV of Rs. 99.25 as of June 30, 2025, as well as post-IPO NAV.

If we attribute FY26 annualized earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at negative P/E of 35.15.  Based on FY25 earnings the P/E stands at 43.53. Thus, the issue appears fully priced. 

The company has posted PAT margins of 9.61% (FY23), 8.92% (FY24), 12.49% (FY25), and 13.33% (Q1-FY26), and RoCE margins of 28.36%, 31.19%, 41.32%, and 11.28% respectively for the referred periods.

DIVIDEND POLICY:
The company has declared a dividend of 11.40% (FY23), 27.70% (FY24), 37.70% (FY25) and 73.10% (Q1-FY26. It has already adopted a dividend policy in April 2025, and further amended in November 2025, based on its financial performance and future prospects.

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown Abbott India, Alkem Lab., Eris Lifesciences, GSK Pharma, JB Chemicals, Mankind Pharma, Pfizer Ltd., Sanofi India, and Torrent Pharma, as its listed peers. They are currently trading at a P/E of 40.8, 29.1, 51.0, 45.6, 40.0, 52.0, 32.3, 26.8, and 59.3 (as of December 05, 2025). However, they are not truly comparable on an apple-to-apple basis. This comparison appears to be an eyewash.

MERCHANT BANKER’S TRACK RECORD:
The three BRLMs associated with the offer have handled 112 pubic issues in the past three fiscals, out of which 28 issues closed below the offer price on the listing date.