04 Aug , 2021 By : Kanchan Joshi
Windlas Biotech, manufacturer of pharmaceutical formulations, initial public offer (IPO) opens for subscription today and the three-day issue will conclude on August 6. The price band has been fixed at Rs448-460 a share for the public offering. The IPO comprises fresh issuance of equity shares worth Rs165 crore and and an offer for sale of up to 5,142,067 equity shares.
Within the first two hours of opening, the issue has been fully subscribed at 1.21 times, led by good response from retail portion. The retail investors' category has been subscribed 2.38 times as of 12 pm, whereas that of non institutional investors at 0.07 times.
Windlas Biotech grey market premium (GMP) is around Rs130 today. The grey market is an unofficial platform, wherein trading starts after the announcement of IPO price band till the listing of IPO shares. The company's shares will be listed on NSE and BSE.
''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.. We have a positive view on the company from the long term perspective,'' Religare Broking said in a note.
The proceeds from the IPO will be utilised for purchasing of equipment required for capacity expansion of the facility at Dehradun Plant -IV and addition of injectables dosage capability at the facility at Dehradun Plant-II. It will also be used for funding incremental working capital requirements, repayment/ prepayment of certain of borrowings and general corporate purposes. At the upper end of the price band, the initial share-sale will fetch Rs401.53 crore.
''Based on FY-2021 adjusted earnings, IPO is priced at PE of 22.2x and EV/EBITDA of 15.58x at the upper band of the IPO price, which is slightly better than the peer’s companies. The Company has a very healthy balance sheet with negative Net Debt/ Equity. Quality CDMO business has huge potential in India in the near future and the company having a good regulatory compliance track record. We expect the upcoming expansion plan in Dehradun and increase in capacity utilization will be the next growth drivers for the company. We are assigning a “SUBSCRIBE" recommendation to the issue,'' Angel Broking said in a note.
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