Eris Lifesciences IPO - Rich Valuations at What Appears to Be Unsustainably High Margins

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Capital Markets

Eris Lifesciences / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/24180" target="_blank" data-smartkarma-citation="entities:24180:1">Eris Lifesciences Limited (0113824Z IN)</a> is an India-focused pharmaceutical company that produces and markets branded generic drugs. The company will be one of only a handful of listed companies that is a pure play on the Indian pharmaceutical market and the only one that is not a subsidiary of a multi-national.  Eris has filed with SEBI to list on the BSE and NSE through an offering of up to 28,875,500 secondary shares (no proceeds to the company). The bid period starts on 16 June and closes on 20 June. The price band of Rs 600-603 values the company at 34x trailing EPS, a small discount to the other pure plays. This Insight briefly discusses the business, industry, financials, and valuation.We think the valuation is reasonable; the business is attractive and would take the deal.

Eris Lifesciences Limited (0113824Z IN) is an India-focused pharmaceutical company that produces and markets branded generic drugs. The company will be one of only a handful of listed companies that is a pure play on the Indian pharmaceutical market and the only one that is not a subsidiary of a multi-national.  Eris has filed with SEBI to list on the BSE and NSE through an offering of up to 28,875,500 secondary shares (no proceeds to the company). The bid period starts on 16 June and closes on 20 June. The price band of Rs 600-603 values the company at 34x trailing EPS, a small discount to the other pure plays. This Insight briefly discusses the business, industry, financials, and valuation.We think the valuation is reasonable; the business is attractive and would take the deal. 

Eris Lifesciences: Ask Some Questions, Take the Deal