Exit Windlas Biotech, look for better options among the listed players
Investors who had invested their savings can hold for short to medium term but those who have borrowed the funds are advised to close their positions.
Domestic formulations manufacturer Windlas Biotech made a muted debut on bourses with its shares listed at a 5% discount over the issue price of Rs 460 per share. The stock opened at Rs 437 on the National Stock Exchange (NSE) and at Rs 439 on the BSE. After hitting an intraday high of Rs 452 the share was quoting at Rs 416.70 at 1:30 pm. With the mid and small caps stocks currently are under selling pressure and thus IPOs with not so good track records and weak financials are getting lukewarm responses.
Listing strategy
Windlas Biotech Ltd is among the top five participants in India’s domestic pharmaceutical formulations contract development and manufacturing organization (CDMO) business in terms of revenue. Although the IPO subscribed more than 22 times, it failed to get listed at least at par and surprised the investors by listing at a discount of 5%.
“Investors who had invested their savings can hold for short to medium term but those who have borrowed the funds are advised to close their positions,” suggested Gaurav Garg is Head of Research at CapitalVia Global Research.
Likewise, Sneha Poddar of Motilal Oswal Financial Services is of the opinion that investors should look for better options among the listed players. “Windlass Biotech, on the other hand, is amongst the top five players in the domestic pharmaceutical formulations CDMOs in terms of revenue. The financial track record has been very weak, though the company is trying to revamp its business which is a long-drawn process,” Poddar added.
On the contrary Yash Gupta of Angel Broking belives Windlas currently trades at adjusted price to earning levels of 20.3 times and EV/EBITDA (enterprise value by earnings before interest tax depreciation and amortisation) of 14.3 times which is below its peers listed companies.
“Retail investors should hold stock for short term to medium terms, as the stock can perform in the near future. Investors who do not receive IPO allotment can also buy at the current market price for the medium term to long term” Gupta said.
About Windlas Biotech
Windlas Biotech is one of the leading companies in the pharmaceutical formulations contract development and manufacturing organizations (CDMO) segment in India. The company offers a range of CDMO services from product discovery to product development, licensing, and commercial manufacturing of generic products including complex generics.
Leading pharma companies such as Pfizer, Sanofi India, Cadila Healthcare, Emcure Pharmaceuticals, Eris Lifesciences, Intas Pharmaceuticals, and Systopic Laboratories Private are some of the marquee customers of the company. Its manufacturing facilities are located at Dehradun with an installed operating capacity of 7,063.83 million tablets/ capsules, 54.46 million pouch/ sachet, and 61.08 million liquid bottles.
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