Anlon Health
IPO Size: Rs. 121 cr, Entirely Fresh Issue
- for working capital Rs. 43 cr
- greenfield capex of Rs. 31 cr over next 18 months
- debt repayment Rs. 5 cr (of Rs. 58 cr debt)
Price band: Rs. 86-91 per share
M cap: Rs. 484 cr, implying 25% dilution
IPO Date: Tue 26th Aug to Fri 29th Aug 2025, Listing Wed 3rd Sep 2025
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Pharma Ingredients Manufacturer
Anlon Health is a Rajkot, Gujarat based manufacturer of active pharmaceutical ingredients (API) and finished dosage formulation for loxoprofen sodium dihydrate used in pain and inflammation management. Company has 400 MTPA installed capacity, and from the IPO proceeds, it plans to add 700 MTPA capacity, which will increase installed capacity to 1,100 MTPA, by Mar 2027.
High Margin Business
Company’s scale of operations is small, with FY25 revenue of Rs. 120 cr and PAT at Rs. 20.5 cr. However, margins are very healthy, at 38% gross and 17% net. FY25 EPS stood at Rs. 5, on an equity of Rs.40 cr (FV Rs. 10 each). RoE, currently at 26%, will shrink to 23%, as equity expands, post IPO.
Stretched Working Capital
Despite 90% revenue generated from India, receivable days are exceptionally high. On Rs.120 cr revenue in FY25, debtors stood at Rs. 75 cr, as of 31.3.25, implying
7.5 months outstanding. Moreover, 1/3rd of these debtors have been outstanding for over 6 months now, yet have not been provided for. Even as of 31.3.24, Rs.12 cr of the Rs. 39 cr debtors were outstanding for over 6 months, which is concerning.
Micro-Cap Stock
M cap of Rs. 484 cr, implies a historic PE multiple of 18x. Since new capacity is 18 months away, not much growth can be expected in FY26E and FY27E, as present capacity is already 84% utilised. Thus, short term growth looks capped.
In July 2024, it raised Rs. 19 cr at Rs. 49 per share from few individual investors. IPO price is nearly 2x, inline with doubling of FY25 PAT, from poor performance in FY24 due to plant shutdown for 4 months.
