Corona Remedies IPO is in its second day of bidding. While the subscription is progressing at a steady pace, the IPO GMP has seen a downward trend. Though it is still above 20%, it is significantly below earlier highs. The big question is what’s worrying investors?
Here is a look at some of the risks highlighted in the IPO DRHP
Corona Remedies IPO: Key risk factors
Corona Remedies IPO DRHP highlighted several risks that could impact the company’s performance. Here are the key details-
1. Dependence on key therapeutic segments
The company relies heavily on two major therapeutic areas, which contributed over Rs 972 crore in Q2FY26. Any decline in demand or rising competition in these segments may significantly affect revenue and cash flows.
2. Reliance on core “engine” brands
A majority of domestic sales come from the company’s flagship “engine” brands. Any adverse development impacting these brands could weaken the company’s financial and operational performance.
3. Heavy dependence on the Indian market
The company generates most of its revenue from India. A slowdown in domestic demand or pricing pressure in the Indian pharmaceutical market may materially impact its financial results.
4. Revenue concentration in select states
Gujarat, Maharashtra, Chhattisgarh, Goa, and Madhya Pradesh account for a large share of revenue. Any adverse developments in these regions may disrupt business performance.
5. High exposure to chronic and sub-chronic segments
Over 70% of domestic sales (as of June 2025) come from chronic and sub-chronic therapies. These areas are subject to regulatory uncertainty and long treatment cycles, making the company vulnerable to disruptions.
6. Dependence on third-party suppliers
The company does not have long-term contracts for raw materials and finished goods. Any supply disruption or increase in input costs may affect production and profitability.
7. Pending regulatory and tax actions
The business is exposed to compliance risks, with six regulatory actions currently pending. In addition, tax proceedings worth Rs 1.69 crore are pending against the promoter group, which may have financial implications.
8. No proceeds from the IPO
As the issue is entirely an Offer for Sale, the company will not receive any funds from the IPO, limiting its ability to deploy capital for expansion or working-capital needs.
9. Dependence on C&F agents
The company relies on 22 carrying and forwarding agents for distribution. Loss or underperformance of key agents may disrupt product reach and impact revenue.
10. High competition in market
The company faces high competition from existing and new companies including generic or biosimilar manufacturers who may offer the same product at lower prices or may have greater market access.