Windlas Biotech’s Rs 401.53-crore IPO has been totally subscribed on the very first day of the bidding, getting a robust response from retail investors. So far on day one, the situation has received 1.28 instances subscription. It has received bids for 78.58 lakh equity shares against the situation size of 61.36 lakh equity shares. In the grey market place on Wednesday, Windlas Biotech shares have been trading at Rs 590 apiece, a premium of Rs 130 or 28 per cent, more than the IPO price tag of Rs 460 per share.
The portion set reserved for retail investors was subscribed 2.5 instances and that of non-institutional investors witnessed 9 per cent, though certified institutional investors are but to place in bids. The price tag/earnings ratio based on diluted EPS for FY 2021 for the firm at the upper finish of the price tag band is 52.87. The P/E of the Nifty50 index as of March 31, 2021, is 33.20x. The weighted typical return on net worth for the last 3 fiscals is 13.27 per cent.
Should you subscribe to the Windlas Biotech IPO?
Windlas Biotech is amongst the leading 5 players in the domestic pharmaceutical formulations contract development and manufacturing organization (CDMO) market in India in terms of income. Analysts say that Windlas Biotech has reported steady development in topline, even even though the bottom line has shown a declining trend. The firm is one of the leading players in the domestic pharmaceutical formulations CDMOs (Contract Development and Manufacturing). Windlas has a pretty extended-term and powerful relationship with top Indian pharmaceutical providers such as Pfizer and Cadila healthcare, SEBI registered investment Advisor INDmoney mentioned in a report.
While the firm does not have any direct listed peers, it competes with unlisted peers such as Theon Pharma, Synokem Pharma, and Innova Captab. Among these, Windlas Biotech has reduced margins and return ratios as compared to Synokem and Theon Pharmaceuticals. “At the higher end of the price band, Windlas Biotech is priced at a P/E ratio of 64 times FY21 EPS (on a fully diluted on post-issue basis). While the P/E looks stretched, businesses are being priced at expensive valuations in this IPO season, and Windlas Biotech is no exception. Given the company’s leadership position, strong growth in topline, and good growth runway, we remain positive on the long-term prospects of this issue,” INDmoney mentioned in a report.
Windlas Biotech is a contract manufacturer for formulation providers (204 in total) for Indian markets and a smaller domestic OTC biz. 3279 goods, 4 plants with 700cr tablets/capsules capacity. “No moat as there are over 400 organized and 15,000 unorganized players in the same space: 2 per cent market share. At valuations of 2.3x P/S, 19x P/EBITDA and 65x PE, this is valued much higher than most Indian branded formulations are; leaving little to nothing on the table for the investors,” Aditya Kondawar, Founder, COO, JST Investments, told TheSpuzz Online.
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