Dipna Pharmachem Limited IPO sees 4600% PAT growth & 132% revenue growth

SME IPOs are the talk of the town! Invest wisely & you’ll sit on a gold mine in a short time!

Dipna Pharmachem Limited is aiming to raise Rs. 15.20 crores by means of its initial public offering (IPO), which is set to open on the 25th of August & close on the 30th of August. In recent times, SME IPOs like Agni Green power, Jayant Infratech, Sailani Tours & Travels, Veerkrupa Jewelers, Rachna Infrastructure Ltd etc.. have created more investor wealth in a short period of time than the mainboard IPOs. Dipna Pharmachem Limited has planned for a fixed price issue at Rs. 38 per equity share, and this is not an Offer for Sale issue. The GMP remains in the positive mark but is still unknown to all.

Before we jump to the details of this IPO we shall know that the Indian pharma exports witnessed a growth of 103% since 2013-14, from INR 90,415 Crores in 2013-14 to INR 1,83,422 Crores in 2021-22. Exports achieved in 2021-22 is the Pharma Sector‘s best export performance ever. It is a remarkable growth with exports growing by almost $10 bn in 8 years.

India ranks 3rd worldwide for production. The nation is the largest provider of generic medicines globally, occupying a 20% share in global supply and is the leading vaccine manufacturer globally. Small or Big pharma companies in India are expected to perform well in the upcoming decade making the pharmaceutical sector the most underrated & undervalued sector.

The most attractive thing about this IPO is the P/E ratio & its EPS. The P/E ratio of the top 3 Indian pharma companies- Sunpharma, Cipla & Dr. Reddy is 27,33 & 23, respectively, whereas the P/E ratio is based on Basic and diluted EPS as of March 31, 2022 of Dipna Pharmachem Limited is 26 only. The EPS of top 3 Indian pharma companies- Sunpharma, Cipla & Dr. Reddy is 16,30 & 139 respectively, whereas the EPS of Dipna Pharmachem Limited is 333! The low P/E ratio & high EPS of Dipna Pharmachem Limited makes it fall under a risk free investment zone.

The financial statement of the company as stated in its DRHP shows an overall growth of its Yearly Cash Flow, Revenue & Profits which might look promising from an investor’s point of view. More or less the company has significantly reduced all its debt within a short span & Plans to raise funding via this issue to meet its general corporate expenses as well as to fund an overseas Joint venture of the company for its expansion. The Revenue has shown an unbelievable growth of 132% from Rs. 3101 lacs in march 2021 to Rs. 7276 lacs in march 2022 whereas the profit has shown a bigger growth of 4670% from Rs. 2.62 lacs in march 2021 to 116 lacs in march 2022! Such unbelievable rate of growth makes the company have a very promising future in the stock market & its industry as well.

Before concluding, it is mandatory to highlight that in pharma business a well established supply chain & well maintained client relations are very important for the survival of the company. Dipna Pharmachem Limited has been profitability surviving in this industry for over a decade which proves the point that the company has a very promising future ahead. The best way to ensure allotment in its IPO is to apply via Net Banking or the ASBA process, make sure you check the DRHP before taking any decisions in any Initial Public Offering.