Onyx Biotec Limited, established in May 2005 and specialising in pharmaceutical manufacturing of sterile water for injections and dry powder products, showed weak indications in the pre-open session on Friday, 22nd November 2024, ahead of its listing on the NSE SME platform. The company operates two manufacturing units in Solan, Himachal Pradesh, serving major clients, including Hetero Healthcare, Mankind Pharma, and Sun Pharmaceutical.

Listing Details

First-Day Trading Performance

Price Movement: Opened at ₹54.05, hit a high of ₹56.75 and a low of ₹51.45 in early trading.
Market Capitalisation: As of 10:02:16 AM IST, the company's market capitalisation stood at ₹102.90 crore.
Trading Volume: The traded volume was 5.92 lakh shares with a traded value of ₹3.21 crore in early trading.

Market Sentiment and Analysis

Market Reaction: Strong selling pressure evident in pre-open session.
Subscription Rate: The IPO was heavily oversubscribed by 198 times (as of November 18, 2024, 6:20:00 PM), with NIIs leading at 602.86 times subscription, followed by retail investors at 118.26 times, and QIBs at 32.49 times.
Grey Market Premium: The GMP declined from ₹15 to ₹10 ahead of listing.

Growth Drivers and Challenges

Expected drivers of future performance:

Large manufacturing capacity
Strong client relationships
Quality certifications
Diverse product portfolio
Contract manufacturing capabilities

Potential challenges:

Inconsistent top-line performance
Fluctuating bottom lines
High competition in pharma sector
Working capital requirements
Regulatory compliance risks

Utilisation of IPO Proceeds

Onyx Biotec plans to use the funds for:

Upgrading Unit I for large volume of parents
Setting up high-speed cartooning line at Unit II
Repayment of loans
General corporate purposes

Financial Performance

The company has shown mixed results:

Revenue increased by 35.99% to ₹53.87 crore in FY2024 from ₹39.62 crore in FY2023
Profit After Tax rose by 64.35% to ₹3.03 crore in FY2024 from ₹1.84 crore in FY2023
For two months ended May 2024, reported revenue of ₹10.54 crore with PAT of ₹1.31 crore

As Onyx Biotec prepares for its market debut, the weak pre-open session indicates cautious market sentiment despite the company's recent growth in financials. The significant discount to issue price suggests investors may be concerned about the sustainability of its growth trajectory in the competitive pharmaceutical manufacturing sector.