Dates: August 04, 2021 to August 06, 2021
Price Band: Rs. 448 to Rs. 460 per share
Minimum Lot: 30 shares
Minimum Application Amount: Rs. 13,440 to Rs. 13,800
Total Issue Size: Up to Rs. 402 Crs (Fresh issue Rs. 165 Crs and OFS Rs. 237 Crs)
Objects of the Offer:
The fresh issue proceeds are expected to be utilised towards funding of
1) Purchase of equipment required for capacity expansion of the existing facility at Dehradun Plant - IV; and addition of injectable dosage capability at their existing facility at Dehradun Plant - II worth Rs. 50 Crs;
2) Funding incremental working capital requirements worth Rs. 47.56 Crs;
3) Prepayment/repayment of certain borrowings worth Rs. 20 Crs; and
4) General corporate purposes.
Samco Research’s Stance:
With over 20 years of experience in manufacturing of solid and liquid pharmaceutical dosage forms, Windlas Biotech is amongst the top 5 players in the domestic pharmaceutical formulations CDMO industry in India in terms of revenue. Company’s focus has been on launching new complex generic products in the chronic therapeutic category linked to lifestyle related disorders which constitutes around 70 percent of their product portfolio. These complex generic products have high barriers to entry as they are generally difficult to develop and require special know-how from a development and manufacturing perspective compared to conventional generic products or unorganized domestic CDMO players. Despite growth in its topline, company has posted declining trends for bottomline on back of impairment of goodwill, gain/loss in a joint venture, and associate company. This issue seems to be aggressively priced but the current sentiment around IPOs could drive this company to make listing gains. Now given that Windlas’ IPO coincides with 3 other issues, 2 of which much bigger, there is a hint of caution that investors must consider. It would be prudent to assess the response to this issue in the first two days of issue period and then only subscribe for listing gains only.