Innova Captab LTD IPO - Review, Valuation, Date & GMP

Innova Captab Limited IPO - Complete Overview

Innova Captab Limited, headquartered in India, is a prominent participant in the pharmaceutical sector, engaging in the research, production, and commercialization of medicinal products. With a presence in India and various other nations, the company boasts several key strengths. These strengths encompass offering services to domestic pharmaceutical enterprises, distributing its proprietary generic medicines within India, and exporting its diverse product range to 20 different countries.

The company offers more than 400 generic medicines under its own brands in India. It has a large network of about 3,400 distributors and stockists, and its products are available in over 96,000 retail pharmacies. Innova Captab also sells its generic medicines online through various e-commerce platforms.

In terms of finances, the company has seen a big increase in the sales of its services to other pharmaceutical companies, with a growth of 97.90% from 954 units in Fiscal 2019 to 1,888 units in the nine months ending on December 31, 2021. Innova Captab is committed to maintaining high quality, being innovative, and expanding globally. The company aims for continued success in the pharmaceutical industry in the future.

The company offers a diverse range of products, including:

1. Tablets
2. Capsules
3. Dry syrups
4. Dry powder injections
5. Ointments
6. Liquid medicines

 

Industry Overview

The Indian pharmaceutical industry, ranked third globally by volume, was valued at Rs 3.6-3.8 trillion in fiscal 2023. It includes formulations and bulk drugs, with strong exports to over 200 countries. The domestic formulations market is projected to grow at a 9-10% CAGR from fiscal 2023 to 2028, reaching Rs. 2.8-3.0 trillion. 

Key drivers are the increasing prevalence of non-communicable diseases, a growing population, and government initiatives. The global pharmaceuticals market is expected to sustain a 4.5-5% CAGR from 2022 to 2027, driven by outsourcing opportunities and growth in API and formulation drug production segments.

 

Innova Captab Limited IPO Overview

Innova Captab Limited IPO date is slated to be open for subscription from December 21, 2023, to December 26, 2023.

This BSE, NSE IPO follows a Book Built Issue IPO.Innova Captab Limited  IPO price is fixed at Rs. 426 to Rs. 448  per share. The upcoming BSE, NSE  IPO will be listed on December 29, 2023.

The Total issue size of this IPO amounts to Rs. 570.00 CR. Within this total issue 50% is issued to the QIB investors, 35% is issued to retail investors, and 15% is issued to other investors.

 

Detailed Video

 

Innova Captab Limited IPO timetable (Tentative)

Events	Date
IPO Opening Date	21 December 2023
IPO Closing Date	26 December 2023
IPO Allotment Date	27 December 2023
Refund initiation	28 December 2023
IPO Listing Date	29 December 2023

 

Innova Captab Limited IPO Details

IPO opening & closing date	21 December to 26 December 2023
Face value	Rs. 10 per Share
Issue Price	Rs. 426 to Rs. 448 per Share
Lot Size	33 Shares
Price of 1 lot	Rs.14,784
Total Issue Size	12,723,214 Shares (aggregating up to Rs. 570.00 Cr)
Offer for sale	5,580,357 shares of Rs. 10 (aggregating up to Rs. 250.00 Cr)
Fresh issue	7,142,857 Shares (aggregating up to Rs. 320.00 Cr)
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Kfin Technologies Limited

 

 

Innova Captab Limited IPO Lot Details

Application	Lot	Shares
Minimum Lot Investment (Retail)	1	33
Maximum Lot Investment (Retail)	13	429
Minimum Lot Investment (HNI)	14	462
Maximum Lot Investment (HNI)	67	2,211

 

Innova Captab Limited IPO Reservation

QIB Shares Offered	50%
Retail Shares Offered	35%
Other Shares Offered	15%

 

Company Financial

Innova Captab Limited's financials reflect a robust performance, with substantial growth in total assets, total revenue, and net worth from FY 22 to June 30 FY 23, indicating financial stability and positive trends.

(Amount in Crore)

Period	Jun 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Total Assets	1,086.16	704.41	575.48
Total Revenue	234.37	935.58	803.41
PAT	17.59	67.95	63.95
Net worth	294.27	276.46	208.56
Reserve & Surplus	228.51	67.90	196.61
Total Borrowings	441.90	235.19	198.18

 

Revenue Distribution Product-Wise

The company primarily derives its revenue from CDMO services and products (71.26% in FY 23), complemented by contributions from domestic branded generics (18.12%) and international branded generics (10.62%), indicating a diversified product portfolio.

(in %age)

Particulars	Jun 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
CDMO Services and Products*	71.26%	73.36%	85.78%
Domestic Branded Generics	18.12%	17.94%	4.63%
International Branded Generics	10.62%	8.71%	9.59%
Total	100.00%	100.00%	100.00%

 

Revenue By Operations

The company's revenue distribution reflects a substantial share from domestic operations, with 89.36% in FY 23, showcasing a robust presence in the Indian market. International operations contribute 10.64%, indicating a diversified revenue stream.

(in %age)

Particulars	Jun 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Revenue from Sale of Goods and Services
India	89.36	91.28	90.40
Outside India	10.64	8.72	9.60
Total	100.00	100.00	100.00

 

 

The Objective of the Issue

The company intends to use the net proceeds for the following objectives.

• Repayment and/or prepayment in part or in full, of certain outstanding loans of the Company.
• Allocating funds to the subsidiary, UML, to settle either partially or entirely the outstanding loans acquired by UML.
• Funding the working capital requirements.
• General corporate purposes.

 

Promoters and Management of Innova Captab Limited IPO

1. Manoj Kumar Lohariwala 
2. Vinay Kumar Lohariwala 

Pre-issue Promoter Shareholding	66.85%
Post-issue Promoter Shareholding

 

Innova Captab Limited IPO Lead Managers

• ICICI Securities Limited

 

Peers of Innova Captab Limited

Innova Captab Limited holds a face value of Rs. 10 per share and exhibits competitive metrics, boasting a P/E ratio of 31.64 and EPS of Rs. 14.16, positioning favourably among its pharmaceutical peers.

Name of the Company	Face Value (Rs. per Share)	P/ E	EPS (Basic) (Rs.)
Innova Captab Limited	10.00	31.64	14.16
Torrent Pharmaceuticals Limited	5.00	57.61	36.79
Laurus Labs Limited	2.00	25.53	14.69
Ajanta Pharma Limited	2.00	42.91	45.89
J. B. Chemicals and Pharmaceuticals Limited	2.00	28.61	53.00
NATCO Pharma Limited	2.00	19.90	39.18
Eris Lifesciences Limited	1.00	33.01	28.10
Indoco Remedies Limited	2.00	22.74	15.44
Suven Pharmaceuticals Limited	1.00	37.13	16.16
Windlas Biotech Limited	5.00	22.04	19.70

 

Evaluation

The IPO is priced in the range of Rs 426 to Rs. 448  per share.

 

Evaluation of P/E Ratio:

- Considering the FY23 EPS of Rs 14.16 from the last year, the resulting P/E ratio is 31.64x.
- Taking into account the weighted EPS of Rs 12.72 for the last three years, the P/E ratio amounts to 35.22x.

 

Comparative Analysis with Listed Peers:

- Torrent Pharmaceuticals Limited has a P/E ratio of 57.61x (the highest).
- NATCO Pharma Limited has a P/E ratio of 19.90x (the lowest).
- The industry's average P/E is 32.17x.

 

Consequently, the IPO Price range at a P/E of 31.64x to 35.22x is considered highly overvalued.

 

Dividend Policy

The company hasn't paid dividends in past fiscal years. Whether we can pay them in the future depends on factors like profits, past dividend trends, capital needs, legal restrictions, and other relevant considerations evaluated by our Board.

 

 

IPO's Strengths

• They maintain strong ties with 182 key customers in the CDMO(contract development and manufacturing organisations) business, including prominent pharmaceutical companies like Cipla, Glenmark, and Lupin, fostering well-established relationships in the Indian pharmaceutical industry.
• As a prominent CDMO in the Indian pharmaceutical formulations market, they secured top rankings in operating revenue and profitability, according to the CRISIL Report (October 2023). 
• With two top-notch manufacturing facilities in Baddi, Himachal Pradesh, they boast high-efficiency operations, producing a range of pharmaceuticals. 
• Their branded generics business, both domestically and internationally, is rapidly growing. In Fiscal 2023, their domestic branded generics revenue reached Rs.1,661.61 million, constituting 95% of India's generics industry, according to CRISIL Research.
• The company prioritized R&D to expand our product range, appealing to CDMO clients and boosting our branded generics. Recognized by DSIR, our Baddi facility, along with the upcoming Panchkula centre, houses advanced equipment for developing high-quality formulations.
• They consistently excelled financially, ranking third in operating revenue, second in operating profit margin, and third in net profit margin among Indian formulation CDMO players in Fiscal 2022.

 

IPO's Weaknesses

• Operating in a highly competitive market, facing competition from companies in India and other jurisdictions.
• Reliance on R&D activities, with uncertainties in timely and cost-effective development of new products.
• Vulnerability to pricing and supply challenges caused by raw material shortages or increased costs.
• Exposure to pricing and demand fluctuations due to healthcare industry reforms and pharmaceutical pricing uncertainties.
• Dependency on a few CDMO customers, making us vulnerable to adverse developments or challenges in maintaining relationships.

 

IPO GMP Today

The Last GMP of Innova Captab Limited IPO is Rs.32.

 

Conclusion

Innova Captab Limited, a pharmaceutical powerhouse, has consolidated its position in the industry through robust research, manufacturing, and a vast market presence. With strengths in CDMO services, a growing portfolio of branded generics, and expanding global exports, the company is poised for sustained success. Despite commendable financial growth, potential investors should weigh the competitive market, R&D dependence, and pricing challenges as part of their decision-making process.

 

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

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