Innova Captab Limited is an integrated pharmaceutical company in India with a presence across the pharmaceuticals value chain including research and development, manufacturing, drug distribution and marketing and exports. The business includes (i) a contract development and manufacturing organization ('CDMO') business providing manufacturing services to Indian pharmaceutical companies, (ii) a domestic branded generics business and (iii) an international branded generics business. In Fiscal 2023 and in the three months ended June 30, 2023, company had 182 and 133 CDMO customers, respectively. In Fiscal 2023 and in the three months ended June 30, 2023, they manufactured a diverse generics product portfolio of over 600 products and market them under the own brands in the Indian market through a developed network of approximately 5,000 distributors and stockists and over 150,000 retail pharmacies. In addition, during Fiscal 2023 and the three months ended June 30, 2023, they exported branded generic products to 20 and 16 countries, respectively. Revenue from operations as per the Restated Consolidated Financial Information has grown at a 50.19% CAGR from Rs 4,106.62 million in Fiscal 2021 to Rs 9,263.80 million in Fiscal 2023. Revenue from operations as per the Restated Consolidated Financial Information was Rs 2,332.43 million in the three months ended June 30, 2023. Company has a dedicated R&D laboratory and pilot equipment located at the manufacturing facility in Baddi, Himachal Pradesh, which is recognized by Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India ('DSIR'). In addition, they are looking to establish a new R&D center in Panchkula, Haryana. The manufacturing is undertaken at the two manufacturing facilities in Baddi, Himachal Pradesh along with a new facility they are planning in Jammu. In the CDMO business, they have developed relationships across the Indian pharmaceutical industry. Some of the key customers include Cipla Limited, Glenmark Pharmaceuticals Limited, Wockhardt Limited, Corona Remedies Private Limited, Emcure Pharmaceuticals Limited, Lupin Limited, Intas Pharmaceuticals Limited, Leeford Healthcare Limited, Medley Pharmaceuticals Limited, Cachet Pharmaceuticals Limited, Eris Healthcare Private Limited, Indoco Remedies Limited, J. B. Chemicals and Pharmaceuticals Limited, Oaknet Healthcare Private Limited, Zuventus Healthcare Limited, Ajanta Pharma Limited, Mankind Pharma Limited and Smart Laboratories Private Limited. Revenue from the CDMO business on a restated consolidated basis has grown at a 35.36% CAGR from Rs 3,708.71 million in Fiscal 2021 to Rs 6,795.56 million in Fiscal 2023. Revenue from the CDMO business on a restated consolidated basis was Rs 1,662.10 million in the three months ended June 30, 2023. As per financial performance, Innova Captab Limited has posted total income / net profits of Rs 412.03 Cr / Rs 34.50 Cr (FY21), Rs 803.41 Cr / Rs 63.95 Cr (FY22), Rs 935.58 Cr / Rs 67.95 Cr (FY23) and Rs 234.37 Cr / Rs 17.59 Cr (upto Q1 FY24). So as per previous financials data, company has shown average growth. Company has an average EPS of Rs 12.72 and average RoNW of 26.48% for last three fiscals. Issue is priced at a P/BV of 7.31 as per NAV of 61.31 as on 30.06.23. If we attribute latest earnings of FY22, FY23, and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 40.09, 37.73 and 36.43 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, two lead managers are associated with this IPO, and have handled around 90 IPOs in last three fiscals. ICICI Securities Limited : This is 49th IPO from this BRLM. From last 10 IPOs, one opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 10 IPOs, one is trading below issue price and remaining are trading above issue price or at par. ( As on 16.12.2023 ) JM Financial Limited : This is 43rd IPO from this BRLM. From last 10 IPOs, one opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 10 IPOs, all are trading above issue price or at par. ( As on 16.12.2023 ) As per financials, Innova Captab Limited has shown average growth, RoNW is 24.58% and P/E is respectively 40.09, 37.73 and 36.43 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is an integrated pharmaceutical company in India, which is highly competitive segment. Performance of BRLM is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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