The Dehradun-based firm will raise Rs 165 crore through issuance of fresh equity shares, while the promoters and existing shareholders will offload 51,42,067 equity shares worth Rs 236 crore via an offer-for-sale (OFS). The price band for the issue is fixed at Rs 448-460 per share.
“Windlas is focusing on formulation CDMO, and there is no peer company focusing solely on the CDMO model. Considering its return ratios and profitability, the issue seems to be fully priced. But factoring the growth drivers of the CDMO sector and opportunities available for the company, we assign a ‘subscribe for long term’ rating on the issue,” said Rajnath Yadav of Choice Broking.
Considering the FY-21 adjusted EPS of Rs 7.14 on post issue basis, the company is going to list at a PE of 64.39 with a market cap of Rs 1,003 crore. There are no listed companies in India that engage in a business similar to that of the company.
Investors can bid for a minimum of 30 equity shares and in multiples of 30 shares thereafter. 50 per cent portion of the net issue is reserved for qualified institutional buyers (QIBs), while 15 per cent will be allotted to non-institutional investors (NIIs). Retail investors’ quota is 35 per cent of the issue.
The net proceeds from the fresh equity issue will be utilised for purchase of equipment required for capacity expansion of existing facility at Dehradun Plant, repaying of borrowings and working capital requirements.
Analysts believe there is ample growth opportunity for the company. The global formulations outsourcing market is expected to reach $28-32 billion by 2025 owing to the growing demand for generics and biologics.
“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. We have a positive view on the company from a long-term perspective,” said Nirvi Ashar of Religare Broking.
In FY20, the company’s market share was approximately 1.5 per cent in terms of revenue in the domestic formulations CDMO industry.
Windlas Biotech counts Pfizer, Sanofi India, Cadila Healthcare and Emcure Pharma among its marquee customers.
Analysts at Marwadi Shares, Angel Broking, GEPL Capital and BP Wealth also suggest subscribing to the issue. The bidding will close on August 6.
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