IPO analysis: Windlas Biotech Limited

IPO rating: Invest for listing gains  

About the issue:  

Windlas Biotech Ltd is one of the leading companies in the pharmaceutical formulations contract development and manufacturing organisations (CDMO) segment in India. The company is coming out with its initial public offering (IPO) of equity shares with a face value of Rs 5 per equity share. The issue size of the company is Rs 401.54 crore, with a fresh issue comprising Rs 165.00 crore while the remaining include the sale of shares worth Rs 236.54 crore by existing investors, according to its red herring prospectus. The price band of the issue has been fixed at Rs 448 to Rs 460 per equity share. The IPO opening date is August 04, 2021, while it will close on August 06, 2021. It will be listed on the exchange on August 17, 2021. The IPO market lot size is 30 shares. A retail-individual investor can apply up to a maximum of 14 lots (420 shares or Rs 1,93,200). The net proceeds generated from the IPO will be utilised towards the purchase of equipment required for capacity expansion at its existing facility at Dehradun Plant IV, to finance incremental working capital requirements of the company, repayment/prepayment of the company's borrowings, and other general corporate purposes.  

Windlas Biotech IPO details  

About the company:  

Incorporated in the year 2001, Windlas Biotech Ltd offers a range of CDMO services from product discovery to product development, licensing, and commercial manufacturing of generic products including complex generics. It also sells its own branded products in the trade generics and OTC markets. The business operates in three verticals; the first one being primarily CDMO products & services, second being the domestic trade generics and over-the-counter (OTC) market (nutraceutical & health supplement products) while third being the export vertical.  

Competitive strengths:  

• Leading market player in the domestic pharmaceutical formulation CDMO segment. 

  Strong focus on the chronic therapeutic category. 

  State-of-the-art manufacturing facilities in Dehradun, Uttarakhand. 

  Professional and experienced Promoters and a senior management team. 

  An innovative product portfolio of complex generic products. 

  Robust financial performance track record

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Company financials:  

Recommendation:  

The company is focussing to launch complex generic products in the chronic therapeutic category related to lifestyle-related disorders. It is amongst the top five players in the domestic pharmaceutical formulations contract development & manufacturing organisation (CDMO) industry in India in terms of revenue. The company has over two decades of experience in this segment. The prevalence of chronic diseases in India has been increasing in the last few years, specifically in certain key therapeutic categories, such as, anti-diabetic, cardiovascular, neuropsychiatry, and respiratory therapies that are treated with ‘multi-drug therapy’ by physicians, i.e. the specific use of two or more drugs for single or multiple chronic conditions in an individual. Moreover, multi-drug therapy has gained importance over the past few years in the healthcare sector and is expected to aid the growth of pharmaceutical consumption. The leading pharma companies i.e. Pfizer Ltd, Sanofi India Ltd, Cadila Healthcare Ltd, Emcure Pharmaceuticals Ltd, Eris Lifesciences Ltd, Intas Pharmaceuticals Ltd, and Systopic Laboratories Private Limited are some of the marquee customers of Windlas Biotech. Its manufacturing facilities are located at Dehradun with an installed operating capacity of 7,063.83 million tablets/capsules, 54.46 million pouch/sachet, and 61.08 million liquid bottles. It is further planning to upgrade its capacities with the capital received, which will be beneficial for the company, going forward. Owing to the above reasons, we recommend investing in the company’s IPO for a listing gain.

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