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26 Aug, 2025 12:21

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Choice Equity Broking IPO report on Windlas Biotech

Pharmaceutical formulations contract developer and manufacturer Windlas Biotech Ltd. (WBL), is planning to raise up to Rs. 400cr through an IPO, which opens on 4th Aug. and closes on 6th Aug. 2021. The price band is Rs. 448 - 460 per share. • The issue is a combination of fresh and OFS. The company will not receive any proceeds from the OFS portion. Of the net proceeds from the fresh issue, Rs. 50cr will be utilized for capacity expansion and addition of injectable dosage facility at its existing facilities, Rs. 47.5cr will be used to fund the working capital requirement and another Rs. 20cr will be used to repay/prepay certain debt availed by the company. • Through the OFS, Tano India Private Equity (investor selling shareholder) is fully offloading its 22% stake.

Valuation and Outlook

WBL is focusing on formulation CDMO and there is no peer company focusing solely on the CDMO model. At higher price band of Rs. 460, the company is demanding a P/E valuation of 26.6x (to its restated FY21 EPS of Rs. 17.3). Considering its return ratios and profitability, the issue seems to be fully priced. But factoring the growth drivers of the CDMO sector and opportunities available for the company, we assign a “Subscribe for Long Term” rating for the issue.

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