Windlas Biotech, the domestic pharmaceutical formulations contract development and manufacturing organization, is going to open its initial public offering this week. This would be the second pharma company after Glenmark Life Sciences to launch IPO this year 2021.
Here are 10 key things to know before subscribing the public issue:
1) IPO Dates
The company has decided to open its public offer for subscription on August 4 and the offer will close on August 6, while the anchor book, if any, will be opened for a single day on August 3, the day before issue opening.
2) Public Issue Details
The initial public offer comprises a fresh issue of Rs 165 crore, and an offer for sale of 51,42,067 equity shares. The offer for sale comprises a selling of 11,36,000 equity shares by Vimla Windlass, and 40,06,067 equity shares by Tano India Private Equity Fund II.
3) Price Band
The price band for the offer has been fixed at Rs 448-460 per equity share.
4) Fund Raising and Objectives of Issue
The company is planning to raise Rs 395.36 crore at lower end of price band, and Rs 401.53 crore at upper price band.
The net proceeds from fresh issue will be utilised for purchase of equipment required for capacity expansion of existing facility at Dehradun Plant – IV, addition of injectables dosage capability at existing facility at Dehradun Plant-II; incremental working capital requirements; repayment of certain of borrowings; and general corporate purposes.
The company will not receive any proceeds from offer for sale issue as the same money will go to selling shareholders.
5) Lot Size and Categorywise Portion
Investors can bid for a minimum of 30 equity shares and in multiples of 30 equity shares thereafter. The minimum investment by retail investor will be Rs 13,800 per lot and the maximum investment would be Rs 1,93,200 for 14 lots. Retail investors are allowed to invest up to Rs 2 lakh in the IPO.
The company has reserved up to Rs 50 percent of the offer for qualified institutional buyers, 15 percent of the offer for non-institutional bidders and the remaining 35 percent for retail investors.
All potential Bidders (except anchor investors) are required to mandatorily utilise the Application Supported by Blocked Amount (ASBA) process providing details of their respective bank accounts and UPI ID, in which the corresponding bid amounts will be blocked by the Self Certified Syndicate Banks (SCSBs) or the Sponsor Bank. Anchor investors are not permitted to participate in the offer through the ASBA process.
6) Company Profile
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 revenue, having over two decades of experience in manufacturing both solid and liquid pharmaceutical dosage forms and significant experience in providing specialized capabilities.
It provides a comprehensive range of CDMO services in compliance with current good manufacturing practices (GMP) with a focus on improved safety, efficacy and cost. In FY20, its market share was approximately 1.5 percent in terms of revenue in the domestic formulations CDMO industry.
In addition to providing services and products in the CDMO market, the company also sells own branded products in the trade generics and over-the-counter (OTC) markets as well as export generic products to several countries.
Its complex generic products portfolio primarily comprises fixed dosage combinations, fixed dosage plus modified release combinations, customized generics and chewable or dispersible, which was 68.48 percent in FY21 of total product portfolio.
The complex generic products market has a high barrier to entry as these products are generally difficult to develop and require special know-how from the development and manufacturing perspective compared to conventional generic products.
7) Strengths and Strategies
a) It is amongst the top five players in the domestic pharmaceutical formulations CDMOs in terms of revenue, with focus on the chronic therapeutic category.
b) It has an innovative portfolio of complex generic products supported by robust research & development (R&D) capabilities.
c) It has an efficient and quality compliant manufacturing facilities with significant entry barriers. It currently owns and operates four manufacturing facilities located at Dehradun in Uttarakhand. As of March 31, 2021, its manufacturing facilities had an aggregate installed operating capacity of 706.38 crore tablets/capsules, 5.44 crore pouch/ sachet and 6.108 crore liquid bottles.
d) It has developed relationships with leading Indian pharmaceutical companies, including Pfizer, Sanofi India, Cadila Healthcare/ Zydus Healthcare, Emcure Pharmaceuticals, Eris Lifesciences, Intas Pharmaceuticals, and Systopic Laboratories.
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e) It has a consistent track record of financial performance.
f) It has an experienced promoters and senior management with a professional and technically qualified team.
a) It intends to capitalize on expansion opportunities by leveraging leadership position in the CDMO industry.
b) It intends to continue to grow CDMO customer base.
c) It intends to expand product portfolio and delivery systems by enhancing R&D and manufacturing capabilities.
d) It intends to focus on the domestic trade generics and OTC Brands SBV and high growth export markets by capitalizing on industry opportunities.
e) It intends to foray into high growth injectables segment.
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f) It intends to augment organic growth by pursuing selective acquisitions and strategic alliances.
The company reported profit at Rs 15.6 crore on revenue of Rs 427.6 crore in FY21 and profit of Rs 16.2 crore on revenue of Rs 328.9 crore in FY20.
In addition, the company has been able to continue its growth despite the operating restrictions/ lockdown imposed on account of the Covid-19 pandemic, and revenue from operations increased by 30.03 percent from Rs 328.85 crore in FY20 to Rs 427.6 crore in FY21. Earnings before interest, tax, depreciation and amortisation (EBITDA) also increased by 60.35 percent from Rs 34 crore in FY20 to Rs 54.52 crore in FY21.
9) Promoters and Management
Ashok Kumar Windlass, Hitesh Windlass, Manoj Kumar Windlass and the Promoter Trust are the promoters of the company, having a total shareholding of 70.20 percent of the pre-offer paid-up equity share capital.
Vivek Dhariwal is the Chairman and Non-Executive Independent Director of the company. He holds a bachelor's degree in technology (chemical engineering) from the Indian Institute of Technology, Bombay and a master's degree in science (chemical engineering) from University of Kentucky. He has over 20 years of experience in manufacturing and supply operations. He was previously associated with ICI India, Baxter India and Pfizer.
Ashok Kumar Windlass is the Wholetime Director of the company. He holds a diploma in civil engineering from Government Polytechnic, Ambala City. He has over 20 years of experience in the manufacturing and pharmaceutical business in India. He is one of the promoters and one of the founders of the company. He plays a significant role in the administration, legal and engineering functions of the company.
Hitesh Windlass is the Managing Director of the company. He holds a bachelor's degree in ceramic engineering from the Indian Institute of Technology, Banaras Hindu University, a master’s degree in science in materials science and engineering from The Georgia Institute of Technology and a master’s degree in business administration from the Graduate School of Business, University of Chicago. He has set up the domestic trade generics, OTC brands and exports SBVs and plays a significant role in driving the technical operations, quality, R&D, manufacturing strategy and financial strategy of the company. He has over 13 years of experience in the field of management. He was previously associated as a process engineer with Intel Corporation, USA.
Manoj Kumar Windlass is the Joint Managing Director of the company. He holds a bachelor’s degree in business administration from Georgia State University, Atlanta. He has over 15 years of experience in product development, operations, procurement and portfolio functions of the medicine business. He has set up company's CDMO services and products SBV and plays a significant role in driving the product portfolio decisions and overall commercial operations including business development, supply chain and procurement of the company.
Pawan Kumar Sharma is an Executive Director of the company. He holds a bachelor's degree in Law from the Hemwati Nandan Bahuguna Garhwal University, Srinagar (Garhwal). He is responsible for the commercial and administrative activities of the company. He has over 20 years of experience in the pharmaceutical industry.
Prachi Jain Windlass is the Non-Executive Director of the company, while Srinivasan Venkataraman and Gaurav Gulati are Non-Executive Independent Directors on the board.
Komal Gupta is the Chief Financial Officer of the company. She holds a bachelor's degree in commerce from Dr Babasaheb Ambedkar Marathwada University. She is a fellow member of the Institute of Chartered Accountants of India, an associate member of the Institute of Company Secretaries of India and the Institute of Cost and Works Accountants of India. Prior to joining the company, she has worked at Perfect Circle India, Anand Automotive Systems, and DSM Sinochem Pharmaceuticals India.
Shailesh Gokhale is the Chief Operating Officer of the company. He holds a master's degree in technology (chemical engineering) from Indian Institute of Technology, Delhi. He has experience in the field of pharmaceutical Industry. Prior to joining the company, he has worked at Paras Pharmaceuticals, Cipla, Cadila Pharmaceuticals, Biocon, ACG Associated Capsules, Fresenius Kabi Oncology and Pfizer Products India.
10) Allotment, Refunds and Listing Dates
Windlas Biotech will finalise the IPO share allotment on August 11, and the funds will be refunded or unblocked from ASBA account on August 12.
Equity shares issued will be credited to demat accounts of eligible investors on August 13, and the trading in equity shares will commence with effect from August 17.
Equity shares are proposed to be listed on BSE and NSE. SBI Capital Markets, DAM Capital Advisors and IIFL Securities are the book running lead managers to the offer.