Innova Captab IPO Review – GMP, Pricing, Financials and More

Innova Captab IPO Review: As health problems surge around the world following the pandemic, interest in pharmaceutical companies has increased.

One of the companies in the industry announcing an initial public offering (IPO) is Innova Captab Limited.

The IPO will open for subscription on December 21, 2023 and will close on December 26, 2023. In this article, we look at Innova Captab IPO review and analyze its strengths, weaknesses, financials, and GMP. Read on to find out!

Innova Captab IPO Review

About Us

Founded in 2005, Innova Captab Limited is an Indian integrated pharmaceutical company with a presence across the pharmaceutical value chain, including R&D, manufacturing, pharmaceutical distribution, marketing and export.

The company’s business is divided into three segments:

• CDMO business providing research, product development and manufacturing services to Indian pharmaceutical companies;
• Domestic brand generic business
• This is a generic business for an international brand.

According to Crisil Report, the company recorded the third highest operating revenue, second highest operating margin, third highest net profit margin and second highest return on equity as of FY22.

The company has developed a diverse portfolio of branded generic products that include tablets, capsules, dry syrups, dry powder injectables, ointments and liquid oral formulations.

The company distributed its branded products in the Indian market through a network of approximately 5,000 distributors and stockists and over 150,000 retail pharmacies. The company also exported its branded generic products to 20 and 16 countries during FY23 and Q1FY24, respectively.

The company operates from two manufacturing facilities in Baddi, Himachal Pradesh and a new facility planned in Jammu. The company also has a dedicated R&D laboratory and pilot equipment at its manufacturing facility in Baddi, Himachal Pradesh.

The company has a wide range of clients including Cipla Limited, Glenmark Pharmaceuticals Limited, Wockhardt Limited, Corona Remedies Private Limited, Emcure Pharmaceuticals Limited, Lupine Limited, Intas Pharmaceuticals Limited, Medley Pharmaceuticals Limited, Leeford Healthcare Limited, Cachet Pharmaceuticals Limited, Eris Healthcare. there is. Private Limited, Indoco Remedies Limited, JB Chemicals and Pharmaceuticals Limited, Oaknet Healthcare Private Limited, Zuventus Healthcare Limited, Ajanta Pharma Limited, Mankind Pharma Limited and Smart Laboratories Private Limited.

industry information

Contract manufacturing is outsourcing production to a third-party supplier. India has become a popular destination for contract manufacturing due to the availability of skilled manpower, low production costs, and many WHO-GMP certified factories. Pharmaceutical companies are outsourcing research and development and manufacturing activities to shift to asset-light models.

According to an October 2023 CRISIL report, the Indian CDMO market has grown 14% over the past five years from FY 2018 to FY 2023. The report predicts that this trend will continue for the next five years, from fiscal year 2023 to fiscal year 2023. The Indian CDMO market is expected to grow at a CAGR of around 12-14% in FY 2028. According to the report, the market size is expected to grow from Rs 1.31 trillion in fiscal 2023 to Rs 2.4 to 2.5 trillion in fiscal 2028.

Innova Captab IPO Review – Financial Highlights

A look at Innova Captab’s financials shows that the company’s operating revenue has increased from Rs. It increased from Rs.410.66 crores in March 2021 to Rs.926.38 crores in March 2023.

Their profit increased from Rs.34.5 crores in March 2021 to Rs.67.95 crores in March 2023. The company’s net profit margin was 7.34%.

Operating revenue and net profit in the first quarter of 2024 recorded 1.3 trillion won. 2,333.24 billion and 175.9 billion rupees respectively.

In terms of returns, ROE is 24.58% and RoCE is 22.61% as of FY23. These ratios indicate good returns on shareholder capital and efficient use of company resources.

During FY23, the company’s Debt/Equity was reported to be 0.85. This indicates that the company primarily uses its own funds to run its business.

Key players in the market

The following image shows how Innova Captab compares to similar products listed in the market.

Company Strengths

• The company is one of the leaders in CDMO formalization. According to Crisil Report, the company recorded the third highest operating revenue, second highest operating margin, third highest net profit margin and second highest return on equity as of FY22.
• In its CDMO business, the company has developed strong relationships across the Indian pharmaceutical industry with 182 CDMO customers as of FY23.
• The company’s manufacturing capabilities help it provide bulk products to its customers. According to CRISIL Research, the company ranks third among its peers in terms of finished tablet and capsule manufacturing capabilities in India.
• The company’s strong brand awareness, long-term relationships with distributors and continued active engagement have helped it expand its product offering and geographic reach.
• The company’s R&D has supported and will continue to support the development of cutting-edge technologies, delivery systems and manufacturing processes. This helps companies reduce costs, improve safety, and provide growth opportunities.

company’s weaknesses

• The company operates in a highly fragmented and highly competitive industry. If a stronger competitor with more resources is able to respond more quickly to market changes, the company’s market position and financial performance may be harmed.
• The business relies heavily on small contract development and manufacturing organizations (CDMOs). If the number of CDMO customers declines or adverse circumstances prevent us from establishing or continuing relationships with such CDMOs, our operations could be adversely affected.
• The Company’s dependence on China, Chinese SEZs and Hong Kong for raw material supplies leaves it exposed to political, economic and social conditions within China.
• Companies require huge amounts of capital to run their businesses. Our inability to secure such working capital requirements could have a negative impact on our business.
• Shortages in the supply of raw materials, increased costs of raw materials or other input costs may adversely affect product prices and supply. This may have a negative impact on the Company’s business.

Innova Captab IPO Review – GMP

Shares of Innova Captab Limited were trading at a premium of 46.88% in the gray market on December 18, 2023. The stock was lagging at Rs 658. This gives a premium of Rs 210 per share to the cap price of Rs 448.

Key IPO Information

promoter: Manoj Kumar Lohariwala and Vinay Kumar Lohariwala

Book Operations Lead Manager: ICICI Securities Limited and JM Financial Limited

Proposal registered by: KFin Technology Limited

purpose of the problem

IPO proceeds will be used for the following purposes:

• Repayment/advance of all or part of the company loan
• Full or partial repayment/advance of outstanding loans provided by our subsidiary UML.
• Funds the company’s working capital requirements.
• General corporate purposes

Finishing

In this article, we looked at the details of Innova Captab IPO Review. We conclude that despite the CDMO market being highly fragmented, the company has a strong financial position with a dominant position and industry growth. Therefore, the company has good potential to grow in the future.

What do you think the future holds for your company? Applying for an IPO? Let us know in the comments below.

Written by Aaron Barth

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