GreenSignal Bio Pharma: IPO Analysis

gsbplGreensignal Bio Pharma (GSBP) was incorporated in the year 2005 and is  an Indian vaccine manufacturing company that develops, manufactures and  sells BCG vaccine. It produces two products, i.e., BCG vaccine for immunization against tuberculosis and BCG-ONCO for the treatment of urinary bladder carcinoma under the brand name, Urovac. As both vaccines produced by the company are generic drugs it does not require any patents

ALERT:  Greensignal Bio Pharma IPO received poor response and was subscribe 82% only on Day3. Issue  has been  extended for a further period of three days and to close on Thursday 17th November 2016

Issue Details:  

  • Date of Issue:   09 -11-2016 to  11-11-2016
  • Price Band : Rs.  76-80
  • IPO Size:  Estimated at Rs. 1400 crore; Public offer of Sale of 1,45,79,560 Equity shares by the promoters.
  • Lead Managers :   Indian Overseas Bank
  • Purpose of the Issue: Objects of the Offer are to achieve the benefits of listing the Equity Shares on the on the exchanges and to carry out the sale of up to 14,579,560 Equity Shares by the Selling Shareholders.

About The Company :

Greensignal Bio Pharma was incorporated in 2005 and commenced commercial production in the year 2009. It was successful in obtained tenders from Ministry of Health, Government of India during the years 2009-10, 2010-11, 2011-12, 2012-13, 2015-16 and also 2016-17.  As Company could not obtain the tender during the year 2013-14 and 2014-15, there was decrease in its revenues during these years.  A major step for the company was WHO Pre-Qualification during the year 2015 and subsequently acquired the UNICEF Long Term Arrangement.

Greensignal Bio Pharma currently has  two products, namely the BCG vaccine for preventing tuberculosis and the BCG- ONCO for Immunotherapy which is used in the treatment of urinary bladder cancer. The major contributor to its revenues is the BCG vaccine which contributes 82.73% of the revenues for year ended 2016.

Further, the obtaining of WHO – Pre Qualification during November 2015 enabled the company to supply its vaccines to UNICEF. There are only four companies in the world, pre-qualified by WHO for UNICEF supply of BCG Vaccine for immunization against Tuberculosis. GSBPL is one of them and one of the two suppliers of BCG Vaccine in India.

Vaccines manufactured by the GreenSignal Bio Pharma Limited are accredited by the World Health Organization, Geneva and are being used in countries across the globe in their national  Health programs.

Financials:    (Rs. In Lakhs) 

Particulars Q1Fy17 2016 2015 2014 2013 2012
Revenue from operations 1014.7 2,038.72 656.16 350.99 1,167.78 1,126.58
Other income 5.85 10.53 4.13 1.81 2.02
Total revenue 1,020.55 2,049.25 660.29 352.8 1,169.80 1,126.58
Cost of materials consumed 135.73 573.9 160.05 77.27 265.66 348.38
Changes in  inventories 162.43 -164.39 25.25 -8.15 138.91 77.57
Operations Cost 74.49 200.91 64.31 50.33 130.6 142.35
Employee benefits expense 88.81 172 106.42 61.82 219.1 127.67
Finance costs 12.36 66.41 71.15 116.07 158.13 210.89
Depreciation 30.39 119.17 115.1 112.79 112.55 112.33
 Other expenses 143.79 387.49 119.3 48.58 162.02 112.37
Total expenses 648 1,355.49 661.58 458.71 1,186.97 1,131.56
PBT 372.55 693.76 -1.29 -105.91 -17.17 -4.98
Tax 79.46 162.81 20.04 23.8 32.84 43.13
PAT 293.09 530.95 -21.33 -129.71 -50.01 -48.11
Equity 3836.73 3836.73
FV 10 10
EPS 0.76 1.38
Issue Price 80 80
PE 26.32 57.97
CAGR  Sales 3 Yrs 20.41


  • The major contributor to Greensignal Bio Pharma revenues is the BCG vaccine which contributed 73% of the revenues for the period ended March 31, 2016.
  • Vaccine production is a highly regulated sector and any regulatory setback can  impede production of  a vaccine & make a dent in Profitability,
  • Company was making losses in the previous financial years, however it was only in the last financial year and first quarter of this fiscal it has have made profits.
  • High inventory levels suggest that the  products are not fast moving.
  • Company is dependent on Ministry of Health, Government of India as well on arrangement with UNICEF with regard to sales.
  • Promoters stake shall be below 40% after the above IPO
  • In India, the price is regulated for the BCG vaccine and hence it shall remain a drag on company’s  profitability
  • As a consequence of its Pre–Qualification in 2015, UNICEF awarded a long term arrangement for the calendar years 2016, 2017 and 2018, which is the main reason for increase in company revenues for the financial year 2015-16. This is +ve for the company. Even as this recognition & orders from UNICEF company enjoys better prospects but almost complete dependence on BCG Vaccine and  two major procurers Ministry of Health, GOI  and UNICEF is heavy.
  • The IPO the offer is made at 55 plus PE on FY 16 earnings. If Q1FY17 play out equally well for the rest of the year, It PE shall be about 20.5. The company failed to secure orders against tenders in some of the years from ministry of health and its performance and profitability is hence not consistent.
  • Greensignal Bio Pharma issued about 18 lakh equity shares in March 2016 to promoters  at Rs. 80/- per share & after bonus of 3:2 in May 2016 the  promoters are selling the shares back at Rs. 80/- per share which does not instill much confidence.

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