Incorporated in 2005, Innova Captab Limited is an integrated pharmaceutical company in India. It primarily operates businesses like contract manufacturing that provide manufacturing services to pharmaceutical companies, a domestic branded generics business and an international branded generics business.
In FY23, the company had 182 CDMO customers and manufactured a diverse generics product portfolio of over 600 products. These products were distributed by ~5,000 distributors, stockists and over 1,50,000 retail pharmacies in India. It also exported its branded generic products to 20 countries in FY23.
It has two manufacturing facilities in Baddi, Himachal Pradesh and plans for a new facility in Jammu. It has a dedicated R&D laboratory and pilot equipment located at its manufacturing facility in Baddi, Himachal Pradesh, recognized by the Department of Scientific and Industrial Research (DSIR). It employs a team of 29 scientists and engineers as of 31 October 2021.
Under its CDMO business, some of its key customers include Cipla, Glenmark Pharmaceuticals, Wockhardt, Corona Remedies, Emcure Pharmaceuticals, Lupin, Intas Pharmaceuticals, Leeford Healthcare, Medley Pharmaceuticals, Cachet Pharmaceuticals and more. Under its branded generic business, it develops, manufactures and distributes generic formulation products under its own brand names through online and offline channels.
Between FY21 and FY23, the company saw a CAGR rise of 31% in its revenue from operations and 25% in its profit. Moreover, the Indian domestic formulation market is expected to grow at a 9-10% CAGR between FY23 and FY28 which could benefit the company.
And now, Innova Captab Limited is coming out with its initial public offer (IPO). The IPO will be an offer for sale as well as a fresh issue. The money raised through the fresh issue will be utilized to repay borrowings, fund capital expenditure, invest in its subsidiary and for general corporate purposes. Its shares will be listed on the NSE and the BSE.
Here are key details about the Innova Captab IPO:
| Company Name | Innova Captab Limited |
|---|---|
| Company Type | Private |
| Company Established | 2005 |
| Innova Captab IPO Open Date | 21st December 2023 |
| Innova Captab IPO Close Date | 26th December 2023 |
| Innova Captab IPO Allotment Status | 27th December 2023 |
| Credit of Shares to Demat | 28th December 2023 |
| Innova Captab IPO Listing Date | 29th December 2023 |
| Innova Captab IPO Face Value | ₹10 per share |
| Innova Captab IPO Lot size | 33 shares |
| Innova Captab IPO Issue Size | Approx ₹570 crore |
| Innova Captab IPO Listed at | NSE, BSE |
| Innova Captab IPO Price | ₹426 – ₹448 per share |
Financial snapshot
| ₹ crore | FY21 | FY22 | FY23 |
|---|---|---|---|
| Revenue | 410 | 800 | 926 |
| Net profit | 34.5 | 63.9 | 67.9 |
Strengths
- The integrated pharmaceutical company, which has presence across the value chain including research and development, manufacturing, drug distribution and marketing and exports.
- Operates in a growing industry as the Indian contract development and manufacturing organisation (CDMO) market is expected to grow at a CAGR of 12-14% between FY23 and FY28.
- Well established relationships with its marquee CDMO customer base 182 as of FY23.
- Highly efficient operations with the production of 8,191 million tablets and 2,472 million capsules in FY23.
- Rapidly growing generics businesses, which makes it well-positioned to grow as branded generics contributed to 95% of the overall generics industry in India as of FY23.
- Consistent financial performance with EBITDA margins of 13%, 12% and 13% in FY21, FY22 and FY23 respectively.
Risks and threats
- Operates in a highly competitive market with 300 to 400 organised players and approximately 15,000 unorganised players in the domestic formulations industry.
- Dependent on its top 10 customers, they accounted for 54% of its total revenue from CDMO operations in FY23.
- Has incurred significant capital expenditure in the last three years, which makes up ₹11 crore, ₹76 crore and ₹26 crore in FY21, FY22 and FY23 respectively.
- Dependence on China, China SEZ and Hong Kong for raw material supplies exposes it to political, economic and social conditions in greater China.
- Subject to extensive regulation.
- The company is exposed to the risk associated with reforms in the healthcare industry and the uncertainty associated with pharmaceutical pricing, reimbursement and related matters.
- Inability to collect receivables and default in payment as it had total trade receivables of ₹265 crore in FY23, representing over 28% of total revenue.
You can now apply for the Innova Captab IPO on Upstox here.