PremiumWindlas Biotech Ltd, a contract development and manufacturing firm, has come up with its initial public offering (IPO). The offer, which aims to raise Rs401 crore through a fresh issue of shares worth Rs165 crore, also comprises an offer for sale (OFS).
The proceeds from the fresh issue will sued to buy equipment, fund working capital requirements, repay of certain borrowings, among others.
The company has more than two decades of experience in manufacturing both solid and liquid pharmaceutical dosage forms. It is among the top few domestic pharmaceutical formulations in the industry in India in terms of revenue. It company has a strong relationship with leading drug manufacturers and has been suppliers to companies such as Pfizer Ltd, Sanofi India Ltd, Zydus Cadila Healthcare Ltd, Emcure Pharmaceuticals Ltd, Eris Lifesciences Ltd, Intas Pharmaceuticals Ltd and Systopic Laboratories Pvt Ltd etc.
Over FY19-21, Windlas Biotech's revenue and operating profit has grown at a CAGR of 18-19%.
Contract manufacturing offers significant opportunities for growth too. Looking at cost initiatives taken by large manufacturers and also rising competition in the generics space, opportunities for CDMO manufacturers have been on a rise.
Over the past five years, the Indian formulations CDMO market has grown at a rate of 13% compared with the growth rate of 8.6% of the domestic formulations market highlight analysts. "Going forward, domestic formulations CDMO is projected to grow at a CAGR of ~14% by FY25 driven by strong demand from outsourcing by big pharma companies both Indian as well as multinational companies and rising demand for generics in the chronic therapeutic category," said analysts at Religare Broking Ltd.
The company's strengths include a focus on chronic therapeutic categories, innovative portfolio and presence in niche therapies such as injectables.
With its superior product mix, established brand name, strong relationship with leading pharma companies, and capacity additions, analysts believe that the company is well placed to capitalise on opportunities. On the valuation front, at the upper price band, the issue is aggressively priced at 64.4 times price to earnings considering the diluted equity shares and FY21 annualised earnings.
Never miss a story! Stay connected and informed with Mint. Download our App Now!!