Accretion Pharmaceuticals Limited IPO

Company Profile

Accretion Pharmaceuticals Limited is an Ahmedabad-based pharmaceutical company established in 2012. The company specializes in manufacturing and marketing a diverse range of pharmaceutical products, including tablets, capsules, oral liquids, ointments, creams, gels, lotions, medicated shampoos, mouthwashes, dusting powders, and oral powders such as sachets and dry syrups. In addition to its own product lines, Accretion Pharmaceuticals engages in contract manufacturing and operates on a principle-to-principle basis with various marketers.

Business Model of Accretion Pharmaceuticals Limited

1. Contract Manufacturing

• Third-Party Manufacturing: Accretion produces pharmaceutical formulations for various marketing and pharmaceutical companies under their brand names.
• Principle-to-Principle Model: The company enters agreements with clients where it manufactures and supplies products as per mutually agreed terms and specifications.

2. Product Portfolio

• Offers over 400 different formulations including:
  • Tablets, capsules, dry syrups, oral liquids
  • Topical preparations: ointments, creams, gels, lotions
  • Specialized products: medicated shampoos, mouthwashes, dusting powders

3. Export-Oriented Operations

• Significant revenue comes from international markets, primarily in Africa, Southeast Asia, and the Middle East.
• Operates under regulatory-compliant practices that meet international standards (WHO-GMP, ISO-certified).

4. In-House Manufacturing

• Owns and operates a WHO-GMP compliant plant with in-house labs for quality control and microbiological testing.
• This enables better cost control, higher margins, and strict quality assurance.

5. Asset-Light Distribution

• Does not maintain large field sales teams.
• Partners with marketing companies that handle branding and distribution.
• Focuses resources on manufacturing excellence and compliance.

6. Focus on Growth via IPO

• Funds from the IPO are intended for capacity expansion, machinery purchase, debt reduction, and working capital.
• The goal is to strengthen manufacturing capability and expand both domestic and international client bases.

Product Portfolio

1. Solid Oral Dosage Forms

• Tablets – Including coated, uncoated, sustained-release, dispersible, and chewable variants.
• Capsules – Both hard gelatin and soft gelatin types.
• Powders – Oral rehydration salts (ORS), nutritional and therapeutic powders.

2. Liquid Oral Dosage Forms

• Syrups – Cough syrups, antacids, multivitamin formulations.
• Suspensions – Antibiotic and pediatric formulations.
• Dry Syrups – Reconstitutable powders for pediatric and adult use.

3. Topical Preparations

• Ointments – For dermatological conditions and wound healing.
• Creams & Gels – Anti-inflammatory, antifungal, and pain-relief applications.
• Lotions – Medicated and cosmetic dermatology products.

4. Medicated Personal Care

• Medicated Shampoos – Anti-dandruff, anti-fungal, and scalp treatments.
• Mouthwashes – Antiseptic and breath-freshening solutions.
• Dusting Powders – Antifungal and soothing powders.

5. Nutraceuticals & Supplements

• Vitamin and Mineral Syrups – Especially for children and geriatrics.
• Protein and Energy Powders – Dietary supplements in sachets and jars.
• Herbal Products – Based on Ayurvedic and natural ingredients.

6. Specialized/Custom Formulations

• Tailor-made products for clients through contract manufacturing.
• Products developed under specific client brands with unique compositions and packaging.

Financial Snapshot (as of March 31, 2024)

Initial Public Offering (IPO) Plans

Accretion Pharmaceuticals Limited, an Ahmedabad-based pharmaceutical manufacturer, is launching its Initial Public Offering (IPO) on the NSE Emerge platform. The company specializes in producing a wide range of pharmaceutical formulations, including tablets, capsules, syrups, ointments, and powders.

🔍 IPO Details

• IPO Type: SME IPO (Book Building Process)
• Exchange: NSE Emerge
• Issue Size: ₹29.75 crore
• Price Band: ₹96 to ₹101 per share
• Face Value: ₹10 per equity share
• Lot Size: 1,200 shares
• Minimum Investment: ₹1,21,200
• IPO Open Date: May 14, 2025
• IPO Close Date: May 16, 2025
• Listing Date: May 21, 2025
• Lead Manager: Jawa Capital Services Private Limited
• Registrar: KFin Technologies Limited

Objectives of the Issue

The proceeds from the IPO will be utilized for:

• Capital expenditure for purchasing new equipment and machinery
• Upgradation of existing manufacturing facilities
• Repayment or prepayment of certain borrowings
• Funding working capital requirements
• General corporate purposes

Strengths for Investors

1. Diversified Product Portfolio

• Offers 400+ pharmaceutical formulations including tablets, capsules, syrups, ointments, powders, and topical applications.
• Serves multiple therapeutic segments, which reduces dependency on any single product category.

2. Export-Oriented Business

• Strong presence in over 20 countries, especially in Africa, Southeast Asia, and the Middle East.
• Export revenues contribute significantly to overall turnover, offering currency diversification and global exposure.

3. Certified Manufacturing Facility

• Owns a WHO-GMP compliant facility with modern infrastructure and in-house labs.
• Certified with ISO 9001:2015, ISO 14001:2015, and ISO 22000:2018, ensuring adherence to global quality standards.

4. Experienced Leadership

• Promoters and key management personnel have extensive experience in the pharmaceutical industry.
• Strong focus on compliance, innovation, and operational efficiency.

5. Strong Financial Performance

• Sharp improvement in profitability and margins in FY 2023–24:
  • PAT: ₹4.71 crore
  • PAT Margin: 11.51%
  • RoE: 27.85%
  • RoCE: 36.73%
• Indicates efficient capital utilization and profitability growth.

6. Focused B2B Model

• Operates primarily through contract manufacturing and P2P arrangements, which reduces marketing overheads.
• Lean distribution model allows focus on core manufacturing operations and scalability.

7. IPO-Funded Growth

• Proceeds from the IPO will support:
  • Facility expansion and equipment upgrade
  • Working capital needs
  • Debt repayment
• These initiatives are expected to fuel future growth and improve financial stability.

8. Scalable Business Model

• Facility is designed for scale and complies with global standards, enabling quick adaptation to increased demand.
• Potential to expand product range and enter new markets with minimal structural changes.

Future Outlook

🚀 Strategic Growth Initiatives

• IPO-Funded Expansion: The capital raised from the IPO is earmarked for enhancing manufacturing capabilities, upgrading facilities, and bolstering working capital. This infusion is expected to drive operational efficiency and support the company’s growth trajectory.
• Diversified Product Portfolio: With over 400 formulations across various therapeutic segments, Accretion is well-equipped to meet diverse market demands, both domestically and internationally.
• Global Market Penetration: The company plans to deepen its presence in existing markets and explore new geographies, leveraging its WHO-GMP compliant facilities and ISO certifications to meet international quality standards.

📈 Industry Tailwinds

• Rising Global Demand: The global pharmaceutical industry is experiencing increased demand, particularly for generic medicines. India’s role as a major supplier of affordable generics positions companies like Accretion favorably in the global market.
• Government Support: Initiatives such as the Production-Linked Incentive (PLI) scheme are bolstering the pharmaceutical sector in India, providing companies with incentives to expand and innovate.
• Technological Advancements: The adoption of advanced manufacturing technologies and digital tools is enhancing efficiency and product quality, enabling companies to scale operations effectively.

🧭 Vision and Leadership

Experienced Management: The leadership team brings extensive experience in pharmaceutical manufacturing and marketing, providing strategic direction and fostering a culture of excellence.

Mission-Driven Approach: Accretion is committed to delivering high-quality pharmaceutical products that contribute to global health. The company’s mission emphasizes innovation, quality, and customer satisfaction.

Market Positioning and Growth Prospects

Market Positioning

Accretion Pharmaceuticals Limited is strategically positioned in the global pharmaceutical market as a reliable contract manufacturer and a producer of high-quality pharmaceutical formulations. Its market positioning can be defined by the following key attributes:

• Diverse Product Portfolio: Accretion offers over 400 formulations, spanning various dosage forms such as tablets, capsules, syrups, ointments, and topical applications. This wide range enables the company to cater to multiple therapeutic segments, making it adaptable to changing market needs.
• Global Reach with Local Strength: The company has a strong export footprint, with products reaching markets across Africa, Southeast Asia, and the Middle East. This international reach is complemented by the company’s robust domestic operations in India.
• Quality Assurance: Accretion’s WHO-GMP compliant manufacturing facility and ISO certifications position it as a quality-driven player in the market. This commitment to quality not only ensures compliance with global standards but also strengthens its competitive edge in highly regulated markets.
• Cost-Effective B2B Model: By focusing on contract manufacturing and private label solutions, Accretion reduces operational costs associated with marketing and distribution. This allows the company to offer cost-effective solutions to clients while maintaining profitability.

Growth Prospects

Accretion Pharmaceuticals is well-positioned for sustained growth due to several key factors:

• Expansion of Manufacturing Capacity: With the capital raised through its IPO, Accretion plans to expand its production capabilities. This includes purchasing new equipment, upgrading facilities, and increasing operational efficiency, which will allow the company to meet growing market demand.
• Growing Demand for Generics: The global demand for affordable and effective generic drugs is on the rise. Accretion, with its capacity to produce high-quality generics, is poised to capture a larger share of both domestic and international markets as countries shift towards cost-effective healthcare solutions.
• Market Diversification: Accretion is targeting further expansion into untapped international markets, particularly in regions with growing pharmaceutical needs. This geographic diversification will reduce dependency on any single market, providing stability against economic fluctuations in specific regions.
• Technological Advancements: The adoption of advanced manufacturing technologies and digital tools will enhance the company’s productivity, product quality, and time-to-market, giving it a competitive edge in a rapidly evolving industry.
• Strong Industry Tailwinds: The pharmaceutical industry is benefiting from various global factors, including rising healthcare spending, aging populations, and increased awareness of health and wellness. Accretion can capitalize on these trends by offering innovative products and expanding its portfolio to meet emerging consumer needs.
• Focus on R&D and Innovation: To stay ahead of market trends, Accretion is likely to continue investing in research and development to expand its product offerings and improve existing formulations. Innovations in drug delivery systems, as well as the development of new therapeutic solutions, will open up new growth avenues for the company.

Conclusion

With its solid foundation in high-quality manufacturing, international market presence, and a strategy focused on expanding capacity and technological innovation, Accretion Pharmaceuticals is well-positioned for long-term growth. As the global demand for pharmaceuticals continues to rise, especially for generics and cost-effective solutions, Accretion’s strategic initiatives are likely to yield significant growth in both domestic and international markets.