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Asset light business model
Company have an asset light business model whereby it focus on identifying
generic molecules, preparing dossiers, seeking registrations, marketing and
distributing formulations through third party distributors or its own sales force.
Company procure formulations and generic active ingredients in their finished
form from third party manufacturers for onward sale. Company also procure
generic active ingredients for preparation and sale of formulations wherein it
outsource the process of preparation of formulations to third party formulators.
This, benefits company in terms of cost competitiveness and helps it to offer varied
range of formulations as well as generic active ingredients in a timely manner.
This business model also allows company to channelize and efficiently utilise its
time, resources and bandwidth towards developing its core competency of seeking
registrations which would otherwise be spent on inter alia identifying and owning
land on leasehold or freehold basis, setting up research and development (“R&D”)
operations and manufacturing or formulation facilities, technology maintenance
and upgradation or hiring qualified R&D employees or maintaining a workforce to
operate at the manufacturing or formulation facilities, some of which are heavily
capital intensive. Overall, the asset light business model helps company pay
unfettered attention and invest capital and time on identifying generic molecules
and corresponding formulations and generic active ingredients, preparing
dossiers and seeking registrations, thereby driving co’s portfolio of formulations
and generic active ingredients.

Global distribution network 

In the past, company was undertaking the distribution of formulations and generic 

active ingredients through third party distributors based in Europe, NAFTA, Latin 

America and Rest of the World. With an objective to increase its presence in the 

agrochemical value chain, company have set up its own sales force in various 

countries in Europe as well as in Mexico, Colombia, South Africa and India and 

other jurisdictions in addition to third party distributors. As of August 5, 2014, 

company have over 440 third party distributors and over 100 personnel of its own 

sales force in over 60 countries across Europe, NAFTA, Latin America and Rest of 

the World. 

Core competency in registration 

Co’s core competency lies in identifying opportunities in generic molecules and 

corresponding formulations and generic active ingredients, preparing dossiers 

and seeking registrations in the relevant jurisdictions. Co’s library of dossiers & 

number of registrations owned by company have increased progressively. 

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Valuation
The company is bringing the issue at price band of Rs 145-156 per share
which will turn into p/e multiple of 12-13 on post issue eps of Rs 11.85.
The company with its asset light business model, core competency in
seeking registrations, global distribution network & diversified portfolio
is looking attractive investment opportunity.
Hence, looking after all above, we recommend “SUBSCRIBE” the issue

LINK
http://www.moneycontrol.com/mccode/news/article/article_pdf.php?autono=1169781&num=0