Innova Captab Limited, an integrated pharmaceutical company in India, is set to launch its Initial Public Offering (IPO) which would open for subscription on December 21, 2023. This article provides an in-depth analysis of Innova Captab IPO details, about company, objectives, positive factors, risk factors, and a final conclusion and review.
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Innova Captab IPO Details
| IPO Opening Date | December 21, 2023 |
| IPO Closing Date | December 26, 2023 |
| IPO Listing Date | December 29, 2023 |
| Issue Type | Book Built Issue IPO |
| Face Value | Rs 10 per equity share |
| IPO Price band | Rs 426 to Rs 448 per equity share |
| Lot Size | 33 Shares |
| Listing at | BSE and NSE |
| Total Issue Size | Rs. 570 Crores |
| Fresh issue | Rs. 320 Crores |
| OFS | Rs. 250 Crores |
About Innova Captab Limited
Innova Captab operates across the pharmaceutical value chain, including research and development, manufacturing, drug distribution, marketing, and exports. With a robust business model comprising a contract development and manufacturing organization (CDMO) business, domestic branded generics, and international branded generics, the company has shown impressive financial performance.
In Fiscal 2022, Innova Captab ranked among the top players in the Indian formulation CDMO sector, recording substantial revenue growth and maintaining high-profit margins. The company’s diverse generics product portfolio of over 600 products is marketed in India through an extensive network of distributors, stockists, and retail pharmacies. Additionally, its international footprint includes exports to 20 and 16 countries in Fiscal 2023 and the three months ended June 30, 2023, respectively.
Objectives of the IPO
The IPO objectives contains fresh issue and Offer for sale.
- Under OFS, the proceeds would go selling share holders.
- Innova Captab aims to utilize the fresh funds raised through the IPO for the expansion of its manufacturing capacities, as detailed in the Red Herring Prospectus. The company plans to establish a new manufacturing facility in Jammu and a research and development center in Panchkula, Haryana.
Innova Captab IPO Price Valuation
- The IPO price band is Rs 426 to 448 per share
- P/E Ratio Analysis
- If we consider the last year FY23 EPS of Rs 14.16, the P/E ratio works out to be 32x
- If we consider last 3 years weighted EPS of Rs 12.72, the P/E ratio works out to be 35x
- Comparison with listed peers
- Torrent Pharmaceuticals Limited trading at P/E 58x (Highest)
- NATCO Pharma Limited is trading at P/E of 20x (Lowest)
- Industry average P/E is 32x
- Hence, the IPO Price band at P/E of 32x to 35x is fully priced
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Positive Factors Innova Captab IPO
- Leading CDMO Presence: Innova Captab is among the fastest-growing CDMOs in the Indian pharmaceutical formulations market, showcasing its strong position in the industry.
- Diverse Product Portfolio: With over 600 products in its portfolio, the company has demonstrated its ability to meet market demand and maintain a wide-ranging product offering.
- International Expansion: Successful exports to numerous countries indicate the company’s global competitiveness and potential for sustained growth.
- Strong R&D Focus: Innova Captab’s emphasis on research and development is a positive indicator for attracting and retaining CDMO customers and growing its branded generic portfolio.
Risk Factors in Innova Captab IPO
- IPO proceeds contains OFS: The IPO proceeds contains both OFS and fresh issue. OFS portion of the IPO proceeds would go to selling share holders and company would not benefit anything.
- Market Competition: Operating in a highly competitive market, especially in pharmaceutical manufacturing and generic products, exposes Innova Captab to intense competition.
- Acquisition Uncertainty: The recent acquisition of Sharon introduces uncertainties regarding the realization of expected benefits, potentially impacting the company’s overall performance.
- Dependency on Manufacturing Facilities: The reliance on specific manufacturing facilities exposes the company to risks such as equipment breakdowns, industrial accidents, and natural disasters.
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Innova Captab IPO – Should you Invest or Avoid?
Innova Captab Limited’s IPO presents an opportunity for investors to be part of a growing pharmaceutical company with a strong market presence.
The positive factors, including leading CDMO status, international expansion, and a robust R&D focus, make it an attractive prospect.
However, potential investors should carefully consider the outlined risks, such as financial comparability issues and market competition, before making investment decisions.
Investors who has gone through positive aspects and risk factors can invest in this IPO.
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Sir, please review the Akanksha Power and Infrastructure IPO
Its SME IPOs and we don’t review them.
I am very found of your opinion. It gives a vast analysis about various scripts. I usually waiting for each IPO. Please keep posting regularly about each IPO without missing.
Very nice initiatives for general investor’s awareness program