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Quest Laboratories Ltd IPO: Review, Valuation, Date & GMP
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Table of Contents
- Quest Laboratories Limited IPO - Complete Overview
- Quest Laboratories Limited IPO Overview
- Company Financial
- The Objective of the Issue
- Peers of Quest Laboratories Limited IPO
- Evaluation
- IPO's Strengths
- IPO weaknesses
- IPO GMP Today
- Promoters and Management of Quest Laboratories Limited
- Quest Laboratories Limited IPO Lead Managers
- Dividend Policy
- Conclusion
Quest Laboratories Limited IPO - Complete Overview
Established in 1998, Quest Laboratories Limited specializes in manufacturing pharmaceutical formulations spanning a wide spectrum, including antibiotics, antimalarials, antispasmodics, anti-inflammatories, antiemetics, respiratory medications, diabetes treatments, antidepressants, and more.
The company produces a diverse range of products, including ethical drugs, generic drugs, and over-the-counter drugs (OTC).
Quest Laboratories adheres to rigorous quality standards, holding WHO Schedule M GMP and GLP certifications, ensuring compliance with World Health Organization guidelines. Additionally, the company maintains ISO 9001:2015 certification and ISO/IEC 17025:2017 accreditation.
Equipped with advanced instruments such as HPLC (High-Performance Liquid Chromatography), GC (Gas Chromatography), FTIR (Fourier Transform Infrared Spectroscopy), UV (Ultraviolet-Visible Spectroscopy), and Dissolution apparatus, the in-house laboratory ensures quality control and product integrity.
With a manufacturing facility located in Pithampur, Dhar, Madhya Pradesh, spanning approximately 4,065 square meters, Quest Laboratories caters to both private sector and government institutions, receiving regular sales orders.
The company Operate within the domestic market across 12 states and 2 union territories, including Uttar Pradesh, Madhya Pradesh, Maharashtra, Delhi, Jharkhand, Assam, Karnataka, Jammu & Kashmir, Rajasthan, West Bengal, Gujarat, Telangana, Haryana, and Bihar.
Quest Laboratories Limited IPO Overview
Quest Laboratories Limited IPO date is slated to be open for subscription from May 15, 2024, to May 17, 2024. This is an NSE SME IPO follows a Book Built Issue IPO.
Quest Laboratories Limited IPO price is fixed in the range of Rs. 93 to Rs.97 per share.
The total issue size of this IPO amounts to Rs.43.16 Cr. Out of the total share the company has allocated 35% to retail investors, 50% to institutional and 15% to non-institutional investors.
Company Financial
Compared to the financial year ending March 31, 2023, and March 31, 2022, Quest Laboratories Limited has seen growth in total assets, net worth, and total revenue. The profit after tax and total borrowing has also increased.
(Amount in Lakhs)
Period |
31 Dec 2023 |
31 Mar 2023 |
31 Mar 2022 |
Total Assets |
5,869.09 |
4,664.72 |
3,479.86 |
Total Revenue |
6,217.83 |
6,186.60 |
5,954.20 |
PAT |
774.93 |
502.85 |
410.50 |
Net worth |
2,277.15 |
1,502.21 |
999.38 |
Reserve & Surplus |
1,198.39 |
1,394.33 |
891.50 |
Total Borrowings |
460.66 |
409.69 |
312.54 |
Government institution and private sector Revenue Break up
(Amount in Lakhs)
Particulars |
December 31, 2023 |
March 31, 2023 |
March 31, 2022 |
Government Institution |
4,136.93 |
3,817.61 |
3,040.15 |
Private Sector |
2,071.05 |
2,346.45 |
2,908.15 |
Total |
6,207.98 |
6,164.06 |
5,948.30 |
Geography-wise Revenue Break up
(Amount in Lakhs)
State |
December 31, 2023 |
March 31, 2023 |
March 31, 2022 |
Uttar Pradesh |
3412.08 |
1905.92 |
2596.77 |
Madhya Pradesh |
2460.42 |
3119.75 |
1906.14 |
Maharashtra |
23.11 |
295.92 |
430.62 |
Delhi |
14.52 |
20.88 |
4.03 |
Jharkhand |
2.73 |
- |
24.41 |
Assam |
31.17 |
707.88 |
628.88 |
Rajasthan |
- |
0.62 |
- |
Bihar |
- |
4.65 |
5.45 |
Karnataka |
166.48 |
7.20 |
4.49 |
West Bengal |
- |
- |
38.19 |
Gujarat |
- |
38.80 |
14.57 |
Jammu & Kashmir |
97.47 |
62.45 |
- |
Telangana |
- |
- |
144.44 |
Haryana |
- |
- |
1.15 |
Export |
- |
- |
149.25 |
TOTAL |
6,207.98 |
6,164.06 |
5,948.39 |
The Objective of the Issue
The company will use the net proceeds to fulfil the following objectives:
1. Funding of capital expenditure towards purchase of plant and machineries for expansion at the existing manufacturing facility.
2. Funding working capital requirements of the company.
3. General corporate purposes.
Peers of Quest Laboratories Limited IPO
Name of the Company |
Face Value (Rs) |
EPS (Rs) |
P/E Ratio |
Quest Laboratories Limited |
10 |
4.66 |
- |
Beta Drugs Limited |
10 |
19.57 |
66.43 |
Alpa Laboratories Limited |
10 |
5.90 |
15.92 |
Zenith Drugs Limited |
10 |
4.29 |
14.69 |
Evaluation
The IPO is priced within the range of Rs.93 to Rs.97 per share.
Evaluation of P/E Ratio
-
Considering the FY23 EPS of Rs 4.66 from the last year, the resulting P/E ratio is 20.81x.
-
Taking into account the weighted EPS of Rs 3.70 for the last three years, the P/E ratio amounts to 26.21x.
Comparative Analysis with Listed Peers
-
The industry's average P/E is 32.34x.
As a result, the IPO price range, with a P/E ratio ranging from 20.81x to 26.21x, seems fully priced to the industry average of 32.34x.
IPO's Strengths
-
Diverse product capability spanning multiple products.
-
Revenue streams from Government institutions.
-
A well-rounded and varied product portfolio.
-
A technology-driven organization with robust R&D capabilities.
-
Good Laboratory Practice (GLP) certification from the Food & Drug Administration.
-
Experienced Promoter and skilled management team.
-
Efficient supply chain management.
IPO weaknesses
-
The company faces ongoing litigation.
-
Revenue heavily depends on demand from the pharmaceutical industry, posing vulnerability to business disruption.
-
Manufacturing facilities are concentrated in a single region, namely Pithampur, Indore, Madhya Pradesh.
-
Overreliance on government sales may adversely affect business stability.
-
Inability to effectively address heightened competition could result in loss of market share.
-
The company experienced negative cash flows in previous years.
IPO GMP Today
The Latest GMP of Quest Laboratories Limited is Rs.80.
Quest Laboratories Limited IPO timetable (Tentative)
Quest Laboratories Limited IPO is scheduled from May 15 to May 17, 2024, with allotment on May 21, refund initiation on May 22, and listing on May 23, 2024.
Events |
Date |
IPO Opening Date |
May 15, 2024 |
IPO Closing Date |
May 17, 2024 |
IPO Allotment Date |
May 21, 2024 |
Refund initiation |
May 22, 2024 |
IPO Listing Date |
May 23, 2024 |
Quest Laboratories Limited IPO Details
Quest Laboratories Limited IPO, with a face value of Rs.10 per share, opens on May 15 and closes on May 17, 2024, offering 4,449,600 shares at Rs.93 to Rs. 97 per share, with a lot size of 1200 shares, aiming to raise Rs.43.16 Cr, and will be listed on NSE SME.
IPO opening & closing date |
May 15, 2024 to May 17, 2024 |
Face value |
Rs.10 per share |
Issue Price |
Rs.93 to Rs. 97 per share |
Lot Size |
1200 shares |
Price of 1 lot |
Rs. 116,400 |
Issue Size |
4,449,600 shares (aggregating up to ₹43.16 Cr) |
Fresh issue |
4,449,600 shares (aggregating up to ₹43.16 Cr) |
Listing at |
NSE SME |
Issue Type |
Book Built Issue IPO |
Registrar |
Bigshare Services Pvt Ltd |
Quest Laboratories Limited IPO Lot Details
For Quest Laboratories Limited IPO, the retail investor minimum and maximum lot investments are both 1 lot (1200 shares) at Rs.116,400 while for HNI investors, the minimum investment is 2 lots (2400 shares) at Rs.232,800.
Minimum Lot Investment (Retail) |
1 lot |
Maximum Lot Investment (Retail) |
1 lot |
Minimum Lot Investment (HNI) |
2 lot |
Quest Laboratories Limited IPO Reservation
Institutional share Portion |
50% |
Non-institutional share Portion |
15% |
Retail share Portion |
35% |
Promoters and Management of Quest Laboratories Limited
-
Mr. Anil Kumar Sabarwal
-
Ms. Tejaswini Sabarwal.
Pre-issue Promoter shareholding |
90.36% |
Post-issue Promoter shareholding |
65.82% |
Quest Laboratories Limited IPO Lead Managers
-
Shreni Shares Limited
Dividend Policy
The Company has not paid any dividend in the past financial years.
Conclusion
Operating in a competitive environment, the company has experienced negative cash flow in the past. Additionally, the sudden growth in PAT in FY22 has raised concerns about its sustainability. Seasoned investors may apply for the upcoming IPO with a medium-term perspective to gain optimal profit.
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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Frequently Asked Questions
The IPO is scheduled to open for subscription on May 15, 2024.
The issue price for Quest Laboratories Limited IPO is set in the range of Rs 93 to Rs 97 per share.
The total issue size of the IPO is Rs.43.16 Cr, with 35% reserved for retail investors.
The IPO is set to close on May 17, 2024.
The net proceeds from the IPO will be allocated towards several key areas: funding capital expenditure for the purchase of plant and machinery to facilitate expansion at the existing manufacturing facility, meeting the working capital requirements of the company, and addressing general corporate purposes.