Windlas Biotech IPO subscribed 13 times so far on final day of bidding; check grey market premium

Windlas Biotech’s IPO has been subscribed 13.23 times so far on the final day of subscription.

Windlas Biotech IPO
Windlas Biotech IPO was fully subscribed on Day 1.

Windlas Biotech’s IPO has been subscribed 13.23 times so far on the final day of subscription. The Rs 401.5 crore IPO of Windlas Biotech was fully subscribed by investors on the first day of sale and has continued to receive strong interest through the subscription window. The IPO consists of a fresh issue of equity shares worth Rs 165 crore while the remaining is an offer for sale by existing shareholders. Windlas Biotech (WBL) is among the top five players in the domestic pharma formulations CDMO industry in India in terms of revenue with a 1.5% market share.

Retail investors have subscribed the issue 19.42 times so far, bidding for 5.99 crore equity shares against 30.88 lakh shares on offer for them. Qualified Institutional Buyers (QIB) have subscribed the IPO 7.40 times, tendering bids for 1.27 crore shares while non-institutional investors (NII) have subscribed their portion of the IPO 6.87 times. Overall bids have been received for 8.18 crore equity shares, against the 61.36 lakh offered through the IPO. 50% of entire IPO was reserved for QIBs, 35% has been kept for retail investors, leaving 15% for NIIs.

In the unlisted space, Windlas Biotech was trading at a premium of Rs 150 per share earlier this week but trading in the grey market has since waned, said Manan Doshi, Cofounder of UnlistedArena, who tracks grey market premiums. “The pricing of the issue is fully priced in and the premium seen earlier was backed by euphoria. The interest in the market has been divided with a number of IPOs available for investors at this stage,” he added.

Analysts at ICICI Securities believe that Windlas Biotech’s IPO has been priced at FY21 P/E of 26.8x on the upper end of the IPO price band but has not rates the public issue adding that The company also has high asset turnover and return ratios but will need more time and clarity to gauge the sustainability of asset turnover, return ratios and also progress towards strengthening of profitability ratios.

Meanwhile, Choice Broking has a ‘Subscribe for long-term’ rating on the IPO. “At the higher price band of Rs. 460, the company is demanding a P/E valuation of 26.6x (to its restated FY21 EPS of Rs. 17.3). Considering its return ratios and profitability, the issue seems to be fully priced. But factoring the growth drivers of the CDMO sector and opportunities available for the company, we assign a “Subscribe for Long Term” rating for the issue,” they said. The brokerage firm added that there is no peer company focusing solely on the CDMO model.

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