IPO Update : Nectar Lifesciences Ltd.

Nectar Lifesciences Ltd. has come in to the orimary markets with an offer of Public issue of up to 38.70 Lacs equity shares .The issue would constitute 26% of the fully diluted post issue paid-up capital of the company. The company has put the price band of Rs.200-240

Looking into the company :

Chandigarh-based Nectar Lifesciences Ltd. (NecLife) earlier known as Surya Medicare Ltd. is amongst the largest manufacturer and exporter of Cephalosporins and Semi Synthetic Penicillins in India.

The Cephalosporins drug segment is growing at a rapid pace and is the largest selling therapeutic segment in India. The company has aggresive plans to maintain its leadership position in this segment.

The company is also venturing into the Non-Antibiotic segment. The drugs to be produced under this segment belong to the category of Cardiovascular (CVS) / Anti-Histamine Therapeutic Segments. They are realtively new drugs and have huge growth potential.

The issue proceeds will be used to set up a new formulation plants at Baddi and derabassi & invest in Research and development activities.

The company has earned an EPS of Rs.20 for the year 2004-05 which converts into a P/E of 12 at the higher price band.

The company has sizeable debtors on its balance sheet which is around 25%of its sales.

Investment Guru recommends Investors to apply in the IPO. The valuations at the offer price looks reasonable in the current market scenario and leaves some scope for the listing gains. However, Investors should not keep their hopes too high with the listing gains. This is also an opportunity for those who wish to hold on for a long term to enter at the IPO levels.

Issue Opens : 22-June-2005
Issue Closes : 28-June-2005
Listing : BSE & NSE