Windlas Biotech IPO - 5 Things You Must Know Before Applying for an IPO

Windlas Biotech, a company engaged in formulations CDMO business, is tapping the primary market with an IPO. Windlas will raise Rs.402 crore through a mix of fresh issue and offer for sale. The IPO will open on 04 August and close for subscription on 06 August. The price band for the IPO is fixed in the range of Rs.448-460. Here are 5 things  you must know about the Windlas Biotech IPO. 

Key things to know about the Windlas IPO

1.  Windlas is engaged in formulations CDMO. Contract Development Manufacturing is the emerging area within pharma industry. It entails contract manufacture and research on behalf of large companies. These are dedicated outsourcing units driven by R&D. Globally, this is a high growth business and India has been making rapid inroads.

2.  Windlas has a premium client list its contract manufacturing and research outsourcing. Its client roster includes marquee names like Pfizer, Sanofi India, Intas Pharma and Systopic Laboratories. Windlas also has an exports division which caters exclusively to global clients.

3.  The company has a state-of-the-art manufacturing facility at Dehradun with installed operating capacity of 706.38 crore capsules / tablets annually. In addition, the Dehradun facility also has the capacity to manufacture 5.45 crore pouches and 6.11 crore liquid bottles annually. Fresh issue proceeds will be used to expand production capacity.

4.  Between FY18 and FY20, Windlas has been a profit making company. During this period, the profits grew by 50%. Its asset turnover ratio has been consistently above 1, indicating efficient asset utilization.

5.  In terms of valuations, the company has reported P/E of 64X at the upper band of the IPO price band. However, revenues have grown at 38% CAGR while 58% growth in gross profits, which can justify this price.