Morepen Laboratories Limited (NSE: MOREPENLAB; BSE: 500288) has announced the successful subscription of a Qualified Institutional Placement (QIP) for Rs. 200 crore. This strategic move underscores Morepen’s commitment to accelerating growth, enhancing institutional participation, increasing market presence, and improving its financial position. The company aims to fortify its leadership in the field of medical devices and active pharmaceutical ingredients (APIs).

The QIP issue was oversubscribed by 1.68 times, attracting bids worth Rs. 335 crore against the Rs. 200 crore offering. This strong response from institutional investors, including Bank of America Securities Europe, Samsung India, Citigroup, Societe Generale, Nomura, BNP Paribas, Morgan Stanley, and Eminence, highlights the confidence in Morepen’s growth trajectory. Motilal Oswal Investment Advisors Limited served as the book-running lead manager for the issue.

Key points

Mr. Sushil Suri, Chairman and Managing Director of Morepen Laboratories, expressed his gratitude towards shareholders and institutional investors for their unwavering support. He stated that the successful fundraise via QIP marks a pivotal moment in the company’s long-term value creation journey. The infusion of equity capital will empower Morepen to enhance its manufacturing capabilities, explore untapped markets, and expand into new geographies, reaffirming its position as a market leader in home medical devices and a preferred partner in the global pharmaceutical landscape.

The QIP issue was approved by shareholders in an extraordinary general meeting on March 18, 2024. Morepen issued 36.785 million equity shares with a face value of Rs. 2.00 at Rs. 54.37 per equity share, including a share premium of Rs. 52.37 per share, in accordance with SEBI ICDR Regulations.

Recent developments

Morepen Laboratories has reported a significant financial performance for FY24. The company recorded gross revenue of Rs. 1,704 crore, marking a 20% increase from Rs. 1,424 crore in FY23. EBITDA surged by 101% to Rs. 172.60 crore from Rs. 85.67 crore, while PAT rose by 150% to Rs. 96.62 crore from Rs. 38.68 crore in the previous year. This impressive growth is attributed to robust internal accruals and strategic market expansions​.

In addition to the financial growth, Morepen has been focusing on innovation and expanding its product portfolio. The company has recently introduced its revolutionary Intelicaps technology for enhanced probiotic delivery, which is the first of its kind in India. This technology aims to improve the efficacy of probiotics, marking a significant advancement in the medical devices segment​.

Morepen’s stock has also shown strong growth potential, hitting a 52-week high of Rs. 62.85 on August 1, 2024. This milestone reflects the company’s solid financial standing and its potential for sustained growth in the future​.

Impact of the QIP

Morepen’s successful QIP is a testament to the company’s robust business model and strategic vision. “The infusion of Rs. 200 crore will significantly boost Morepen’s manufacturing capabilities and market reach,” said Dr. Kumar. He added that the company’s focus on innovation and expansion into new markets would drive sustained growth and enhance shareholder value over the long term.

  Bank of America Securities Europe, BNP Paribas, Citigroup, Eminence, Morepen Laboratories Limited, Morgan Stanley, Motilal Oswal Investment Advisors Limited, Nomura, Samsung India, Societe Generale, Sushil Suri