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Initial Public Offer - Note

Eris Lifesciences Ltd

Eris Lifesciences Ltd

Issue Highlights:

Issuer: Eris Lifesciences Ltd

Issue Type: 100% Book Built Issue IPO

Issue Open: Friday June 16, 2017

Issue Close: Tuesday, June 20, 2017

Issue Size (Rs)*: 1,740.30 Crores

Face Value: Rs.1 per Equity Share

Price Band: Rs. 600 – Rs. 603 per Equity Share

Minimum Order Quantity Retail: 24 Shares and in

multiples thereafter

Maximum Bid amount for Retail: Rs. 2 Lakhs

Employee Reservation: 1,50,000 shares

Employee Discount: Rs. 60/- per share

Listing: NSE & BSE

Issue Size and Investor Category Allocation

Total Issue Size: 2,88,75,000 Equity Shares*

QIB: 75% of the issue size (2,15,43,750 Shares*)

HNI: 15% of the issue size (43,08,750 Shares*)

Retail Individual Bidders: 10% of the issue size (28,72,500

Shares*)

(* upper price band)

Book Running Lead Managers:

Axis Capital, Citigroup Global, Credit Suisse Securities

Registrar:

Link Intime India Pvt Ltd

Key Business Strategies:

Consolidate our position in therapeutic areas in which we

have significant presence

Target and enhance our presence in large and high-

growth therapeutic areas

Explore in-licensing and co-development opportunities to

leverage our sales, marketing and distribution and

manufacturing infrastructure

Target future patent expiries in India

Enhance our product line and expand our capabilities

through strategic acquisitions

Key Strengths:

Focus on branded prescription based pharmaceutical

products catering to lifestyle related disorders

One of the fastest growing companies in certain high

growth therapeutic areas with a portfolio of

complementary products

Portfolio of high volume and leading brands

Focus on metro cities and class 1 towns in India which

have higher incidence of lifestyle disorders and

Concentration of specialists and super specialists

Multi-faceted product selection and engagement model

leading to growth in prescription for our products

Strong sales, marketing and distribution capabilities

Objects of the Issue:

1. The objects of the Offer are to achieve the benefits of listing

the Equity Shares on the Stock Exchanges and for the sale of

up to 28,875,000 Equity Shares by the Selling Shareholders

2. General Corporate Purpose.

Public issue of 2,88,75,000 equity shares of Rs. 10/- each

(“equity shares”) of Eris Lifesciences Ltd(Company or Issuer).

About the Issuer:

Eris Lifesciences Limited (“Eris”) was incorporated on January 25,

2007. Eris is developing, manufacturing and commercializing

branded pharmaceutical products in select Therapeutic areas within

the Chronic and Acute Categories of the Indian Pharmaceutical

Market (“IPM”), such as: Cardiovascular; Anti-Diabetics; Vitamins;

Gastroenterology; and Anti-Infectives.

It is the fastest growing company, in the Chronic category, among

the top 25 companies in terms of revenues, with revenue growth at

CAGR of 28.9%, between Fiscals 2013 and 2017. The Chronic

category of the IPM contributed 65.6% of their revenues and Acute

Category of the IPM contributed 34.4% in fiscal 2017.

The product portfolio is primarily focused on therapeutic areas which

require the intervention of specialists and super specialists such as

cardiologists, diabetologists, endocrinologists and gastroenterologist

For Fiscals 2016, 2015 and 2014, our net revenue from operations

was Rs. 5,970.21 million, Rs. 5,455.58 million and Rs. 5,088.22

million, respectively. Net revenue from operations grew at a CAGR of

21.50% between Fiscals 2012 and 2016.

Revenue from Operations (Rs. Millions)

Net Profit After Tax (Rs. Millions)

4170.195204.62 5479.86

6054.83

0

2000

4000

6000

8000

FY 13 FY 14 FY 15 FY 16

657.96 655.27833.25

1379.71

0

500

1000

1500

FY 13 FY 14 FY 15 FY 16

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Initial Public Offer - Note

Eris Lifesciences Ltd

Eris Lifesciences Ltd

(₹ in Million)

Particulars As at As at As at As at As at As at

September

30, 2016

March 31,

2016

March 31,

2015

March 31,

2014

March 31,

2013

March 31,

2012

I. EQUITY AND LIABILITIES :

(1) Shareholders' Funds

(a) Share capital 137.50 1.38 1.38 1.38 1.38 1.38

(b) Reserves and surplus 4,185.19 3,055.91 2,676.11 1,843.58 1,188.31 530.35

(2) Non current liabilities

(a) Long-term borrowings - - 5.00 - 0.37 3.81

(b) Deferred tax liabilities (net) - - - - - 0.95 (c) Other long-term liabilities 25.37 24.85 13.37 10.73 16.20 22.00

(d) Long-term provisions 207.15 230.98 199.88 170.21 152.33 89.17

(3) Current liabilities

(a) Trade payables

Due to micro and small enterprises - - - - - -Due to others 594.64 278.94 360.97 326.45 191.38 155.43

(b) Other current liabilities 102.47 253.84 76.57 141.58 65.31 34.48

(c) Short-term provisions 251.72 175.30 205.50 181.90 124.31 120.33

Total 5,504.04 4,021.20 3,538.78 2,675.83 1,739.59 957.90

II. ASSETS :

(1) Non current assets

(a) Fixed assets

(i) Tangible assets 606.94 640.96 605.78 631.97 148.24 105.80 (ii) Intangible assets 377.37 6.95 6.90 6.57 0.79 0.55

(b) Non current investments 101.05 625.95 1,130.50 306.40 115.52 56.68

(c) Deferred tax assets (net) 49.19 54.14 32.92 1.97 2.62 -(d) Long-term loans and advances 442.59 323.04 176.64 183.64 137.71 93.75

(e) Other non-current asset 24.00 - - - - -

(2) Current assets

(a) Current investments 2,522.81 1,437.33 692.40 669.64 465.00 134.52 (b) Inventories 514.95 494.58 538.33 454.85 519.68 239.61

(c) Trade receivables 524.73 253.62 236.21 223.09 165.96 144.07

(d) Cash and cash equivalents 76.40 85.29 49.12 59.02 35.16 88.63 (e) Short-term loans and advances 222.25 96.98 67.71 138.68 148.91 94.29

(f) Other current assets 41.76 2.36 2.27 - - -

Total 5,504.04 4,021.20 3,538.78 2,675.83 1,739.59 957.90

SUMMARY STATEMENT OF ASSETS AND LIABILITIES, AS RESTATED

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Source

for

Note:

DRHP

IMPORTANT: Please

read

the

Red

Herring

Prospectus

of this

issue

carefully

before

investing

in

the

same.

:: Research Desk :: :: Research Desk ::

E-mail:

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Direct Ph: 040 3321 7132

Disclaimer

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contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the

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incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors.

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document.

PF/IPON/08062017/28

Initial Public Offer - Note

Eris Lifesciences Ltd

Eris Lifesciences Ltd

SUMMARY STATEMENT OF PROFITS AND LOSSES, AS RESTATED

(₹ in Million)

Particulars Six

Months

ended

Year

ended

Year

ended

Year

ended

Year

ended

Year ended

September

30, 2016

March 31,

2016

March 31,

2015

March 31,

2014

March 31,

2013

March 31,

2012

1 REVENUE:

Revenue from operations (gross) 3,779.01 6,232.42 5,569.16 5,204.62 4,170.19 2,858.17 Less: Excise duty (105.39) (177.59) (89.30) - - -

Revenue from operations (net) 3,673.62 6,054.83 5,479.86 5,204.62 4,170.19 2,858.17

2 EXPENSES:

(a) Cost of materials consumed 211.43 381.47 317.27 - - -

(b) Purchases of stock-in-trade 358.87 750.78 825.43 1,162.41 1,271.19 705.61

(c) Changes in inventories of finished goods,

work-in-progress and stock-in-trade

78.30 21.40 (55.48) 116.34 (289.05) (84.92)

(d) Employee benefits expense 623.00 1,223.56 1,237.53 878.53 653.01 416.39 (e) Other expenses 980.89 1,974.50 2,016.59 2,163.89 1,618.43 1,207.54

Total 2,252.49 4,351.71 4,341.34 4,321.17 3,253.58 2,244.62

3 Restated Earnings before interest, tax,

depreciation and amortisation (EBITDA)

(1-2)

1,421.13 1,703.12 1,138.52 883.45 916.61 613.55

4 Finance costs 0.43 1.20 0.06 0.37 2.66 3.87

5 Depreciation and amortisation expense 106.66 195.49 146.66 37.45 23.10 19.39 6 Other income 130.82 32.83 34.28 43.60 14.10 27.30

7 Restated Profit before tax (3-4-5+6) 1,444.86 1,539.26 1,026.08 889.23 904.95 617.59

8 TAX EXPENSE

(a) Current tax expense 294.04 313.07 223.73 233.31 250.56 186.35

(b) (Less): MAT credit (119.54) (132.30) - - - -

(c) Net current tax expense 174.50 180.77 223.73 233.31 250.56 186.35 (d) Deferred tax charge / (credit) 4.95 (21.22) (30.90) 0.65 (3.57) (1.68)

Net tax expense 179.45 159.55 192.83 233.96 246.99 184.67

9 Restated Profit after tax (7-8) 1,265.41 1,379.71 833.25 655.27 657.96 432.92