Windlas Biotech IPO comprises fresh issuance of equity shares worth ₹165 crore and an offer for sale of up to 5,142,067 equity shares ( ~ Rs. 236 crore) . Windlas Biotech IPO is expected to garner ₹402 crore. The offer of sale of Rs 236.54 crore is by existing shareholders Vimla Windlass and Tano India Private Equity Fund II.

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Windlas Biotech IPO Details:

Bid OpensWed, 4th August, 2021
Bid Closes Fri, 6th August, 2021
Issue DetailsFresh Issue of Equity Shares  upto ₹ 165 Cr + OFS upto 5,142,067 Equity Shares
Face Value (₹)₹ 5/-
Issue Size (₹ Cr)₹ 395 – 402 Cr
Bid Lot30 Shares 
Price Band₹ 448 – 460
Issue Structure : 
QIB50% of the offer (
NIB15% of the offer ( 60.23 Cr)
Retail35% of the offer (3,055,159 Shares (₹ 138.38~ – 140.54 Cr)
Appls for 1x Retail1.02 Lacs
BRLMsSBI Capital Markets, DAM Capital, IIFL Securities
RegistrarLink Intime India Pvt. Ltd.

Updates :

  • ANCHOR ISSUE: Ahead of its IPO, Windlas Biotech IPO garnered Rs 120.46 crore from 22 anchor investors. These include names like Macquarie, Optimix Wholesale Global Emerging Markets, Invesco Trustee, Kuber India Fund, and Elara India Opportunities Fund. Other anchor investors who participated in the bidding are ICICI Prudential Mutual Fund (MF), UTI MF, Sundaram MF, Kuber India Fund, BNP Paribas Arbitrage, Elara India Opportunities Fund and Canara HSBC Oriental Bank of Commerce Life Insurance Company.

About Windlas Biotech IPO

  • Windlas Biotech Limited was incorporated in 2001.
  • Windlas Biotech is amongst the top five players in the domestic pharmaceutical formulations, contract development and manufacturing organization (CDMO) industry in India, in terms of revenues as per CRISIL.
  • Company’s Domestic Trade Generics and OTC Brands consist of (i) trade generic products; and (ii) OTC brands
  • The company currently owns and operates four manufacturing facilities located at Dehradun in Uttarakhand.
  • As of March 31, 2021, their manufacturing facilities had an aggregate installed operating capacity of 7,063.83 million tablets/ capsules, 54.46 million pouch/ sachet and 61.08 million liquid bottles. In addition, they have recently received a license to manufacture certain APIs at Dehradun Plant as a backward integration.
  • Windlas is already contract manufacturing for some of the leading names like Pfizer, Sanofi India, Cadila Healthcare and Emcure. It already has an installed capacity to manufacture 707 crore tablets/capsules, 5.5 core pouches and 6.1 crore liquid bottles.
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Windlas Biotech IPO: Financials

Particulars / (₹ In Cr)202120202019#
Revenue427.6328.85307.27
Revenue Growth (%)30.03%7.02%
EBITDA 54.523437.74
EBITDA (%)12.75%10.34%12.28%
Profit Before Tax21.7424.6776.12
Net Profit 15.5716.2163.82
RoNW (%)18.19%8.04%8.97%
NAV-Basic (₹ )~109.36115.15114.19
ROCE (%) as stated20.23%12.04%15.86%
Equity Share Capital6.416.416.41
Reserves as stated192.71203.25187.17
Net worth as stated199.12209.66193.59
EPS-Basic (₹ )~8.78.938.61
FV5  
Equity Post IPO10.89
IPO Price460
EPS (Post IPO) FY21 (after EO)14.38
PE 31.99
Market Cap1002

Pros

  • Leading CDMO in India with a focus on the chronic therapeutic category
  • Innovative portfolio of complex generic products supported by robust R&D capabilities
  • Efficient and quality compliant manufacturing facilities with significant entry barriers
  • Long-term relationships with Indian pharmaceutical companies
  • Consistent track record of financial performance
  • • Experienced Promoters and senior management with a professional and technically qualified team

Cons

  • CDMO business is working capital intensive.
  • subject to strict technical specifications, quality requirements, regular inspections and audits by their CDMO customers i
  • Related party transactions
  • insignificant exports

Windlas Biotech IPO: Assessment

  • The proceeds from the IPO will be utilised by Windlas Biotech 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.
  • The company has portfolio of complex generic products supported b R&D capabilities, experienced promoters.
  • Complex generic products have relatively high entry barriers.
  • The company is amongst the top five players in the domestic pharmaceutical formulations CDMOs in terms of revenue.
  • The company provides CDMO services to seven of the top 10 Indian formulations pharmaceutical companies.
  • FY21 slaes includes figures from sale of COVID related medicines and supplements.
  • The EPS on post-issue equity works out to Rs 14.38 (after EO) for FY2021. Windlas Biotech IPO P/E is ~32x.
  • Windlas Biotech IPO was last reported to be commanding a GMP of about Rs. 130 but deals have been few.
  • Recent IPO of Glenmark life sciences had a 10% CDMO business and was priced better than this issue.
  • Though It claims to be in CDMO business where margins are high, same is not reflected in its numbers.
  • PE investor is making a complete exit and the issue amounts to a 40% dilution which doesnot gove comfort.
  • Company’s has low exports.
  • Cadila Healthcare acquired 51% stake in Windlas Biotech wholly owned subsidiary in Oct 2018. There were some rfeulatory issues and the company was sold back to at a lower price of Rs. 103.5 to the company.
  • For company planned capex some second hand machinery is to be purchased, and Rs. 12 cr equipment is to be procured from promoter group company.
  • At this stage I do not intend to apply in Windlas Biotech IPO.

Standard disclaimer:  I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2)  Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors.  I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or  leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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