Windlas Biotech Limited launched its initial public offering (IPO) on August 4. The IPO will be open for subscriptions for three days and close on Friday, August 6. The anchor bookings for the IPO, if any, would have taken place on August 3, before the opening day. The price band of the issue stood at Rs 448 to Rs 460 per equity share.
The grey market premium (GMP) of the company’s issue was listed as Rs 130 on August 4 at roughly 09:30 IST. This indicated that the shares were trading at a premium of Rs 578 to Rs 590 per equity share on the unlisted market.
The lot size of the IPO was listed as having a minimum lot of 1, with 30 shares that carried an application cut-off of Rs 13,800 on the lower end. On the higher end of the lot, there are 420 shares listed with an application cap amount of Rs 193,200 and 14 lots. The retail investors for this issue are allowed to apply for up to 14 lots at the upper maximum of the lot.
Windlas Biotech is looking to scrape up Rs 401.54 crore with its public offering. The issue consists of a fresh issue that aggregates up to Rs 165 crore and an offer for sale (OFS) that has an aggregation of Rs 236.54 crore with 5,142,067 equity shares that carries a face value of Rs 5 per share.
The company is planning to use the proceeds of the IPO to purchase equipment required for capacity expansion of its existing facility at Dehradun Plant IV as well as the addition of injectables dosage capabilities at its other existing plant, Dehradun Plant-II. Portions of the funds will be used to fund the incremental working capital requirements of the company as well as repayments and pre-payments of the firm’s borrowings.
Ajit Mishra the VP of Research from Religare Broking said in a note, “Windlas is one of the leaders in the domestic pharmaceutical formulations CDMO industry. We believe the company is well placed to grab the opportunity arising from the industry given its strong product portfolio, relationship with its customers, R&D capabilities and efficient & quality compliant manufacturing facilities.”
The business operates has three main verticals that contribute to the majority of its income and revenue. The first is the wide range of CDMO products and services. The second vertical is the domestic trade generics and over-the-counter (OTC) market (nutraceutical and health supplement products). The third and possibly the largest vertical of the business is exports.
The company reported a profit of Rs 15.6 crore on a revenue of Rs 472 crore in FY21. In FY20 it was reported as having made a profit of Rs 16.2 crore on revenue from Rs 328.9 crore. The earnings before EBITDA went up by 60.3 per cent in FY21 with Rs 54.52 crore as the mark. This is stacked against the Rs 34 crore it raised in FY20. Despite the pandemic, the company has managed to maintain a strong growth tangent between FY20 and FY21.
This growth can be attributed to the company’s key strengths such as it being a leading market player in the domestic pharmaceutical formulation CDMO industry and its strong focus on chronic therapeutic services. It also has an innovative product portfolio and strong client base that contributed to its financial performance over the past year. However, on the other side of the coin, the key risks are that the company operates in a highly competitive market and it requires a significant amount of working capital.
Speaking on the future growth prospects of the company Mishra said, “On the financial front, the company’s performance has been steady. We have a positive view on the company from the long term perspective.”
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