Alpa Laboratories is entering the capital market on 12th July 07 with a public issue of 95 lakh equity shares of Rs.10 each in the band of Rs.62 to Rs.68 per share.
The company is manufacturing pharma formulations such as ethical drugs, generic drugs OTC drugs and veterinary products in various dosage forms and also manufactures formulations for other companies like CIPLA, Zydus Cadila, Lupin, Glenmark, Genom Biotech, Jenburkt etc.
For FY 07 the total income of the company was at Rs.101.80 crores with PBT of Rs.7.70 crores and PAT of Rs.6.40 crores resulting in an EPS of Rs.5.30. As on 31st March 07, the equity of the company was at Rs.12.06 crores, net worth of Rs.26.85 crores and debt of Rs.18.16 crores.
The company is now increasing capacity of its existing products like liquid injections, dry power, injections, ampoules, tablets, capsules, eye/ear drops and dry syrups by setting up a new plant at Digamber near Indore. The new capacity additions are from 100% for tablets to 460% for ampoules. The total cost of project is Rs.76 crores which is being financed by term loan of Rs.20 crores and proposed issue of Rs.59 crores to Rs.65, depending upon the price discovery.
The proposed issue would increase equity base of the company to Rs.21.56 crores in which promoters stake would be close to 50%. The new project is likely to go on stream by June 2008 and hence effect of expansion would get partly reflected in FY 09. This would project share of the company to be quite expensive on listing. EBITDA margin of 10.4% for FY 07 is nothing great. Hence, share may not be able to give good returns in the short terms by way of listing gain. Better stocks in the secondary market are available in the sector.