Anthem Biosciences
IPO Size: Rs. 3,395 cr, Entirely Offer for Sale (OFS)
- 40% of OFS by the financial investor TrueNorth / formerly India Value Fund (halving 8% holding, at a 39% IRR in 4.25 years)
- 20% by promoters (77% stake to drop to 75%) and 30% by senior management (10% to reduce to about 7%)
- 10% by strategic investor Portsmouth / DavosPharma (4% to reduce to 3%)
Price band: Rs. 540-570 per share
M cap: Rs. 32,011 cr, implying 10.6% dilution
IPO Date: Mon 14th Jul to Wed 16th Jul 2025, Listing Mon Thu 21st Jul 2025
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Bengaluru based CRDMO
Anthem Biosciences is a Contract Research, Development and Manufacturing Organization (CRDMO) with integrated capabilities for both New Chemical Entity (NCE) and New Biological Entity (NBE). This intersection of chemistry and biology is not common, with only a few players like Syngene, Aragen Life, Biocon Biologics having complex NBE capabilities, lacking in some of the listed CRDMOs like Innova Captab, Windlass, Suven.
Superlative Margin
FY25 revenue grew 30% YoY to Rs. 1,845 cr, of which, 90% came from commercial manufacturing and specialty ingredients and 10% from research. Niche capabilities ensure very high margins of 37% at EBITDA and 24% at net level, higher than all listed peers - Syngene (13%), Alivus (formerly Gelnmark Life - 20%) and Sai Life (10%). FY25 PAT of Rs. 451 cr, resulted in an EPS of Rs. 8, on an equity of Rs. 112 cr (face value Rs. 2 each). RoE stood at 21% on net worth of Rs. 2,410 cr and net cash of Rs. 670 cr.
Aggressive Capacity Addition
Anthem has an installed capacity of 270 KL of custom synthesis (NCE) and 142 KL of fermentation (NBE) across 2 plants. A 3rd plant is expected to be commissioned by Sep 2025, to increase custom synthesis capacity by 57% and fermentation capacity by 28% to 425 KL and 182 KL respectively. As of 31.3.25, Rs. 297 cr appears as capital work in progress, while another Rs. 115 cr is capital committed. This is expected to add approximately Rs. 450-500 cr to gross block, which was at Rs. 1,270 cr, as of 31.3.25. A fixed asset turn on 1.5x provides high growth visibility.
A bigger kicker is in the works, with construction of a 4th greenfield plant underway on 30 acres land parcel. While capacity details are not yet announced, total area of 3 plants combined is less than 30 acre, implying huge capacity addition over the next 3 years. Another unit 5 is also planned, on a 20 acre land, after the 4th plant, providing healthy long term growth visibility.
Priced in line, with Growth and Margins
Estimating 30% growth for current fiscal, IPO is priced at a PE multiple of 50x, on FY26E EPS of around Rs. 11. This is similar to Syngene, which is 2x Anthem’s topline but similar bottomline, no growth in FY25 and lower EBITDA margin of 29%. Sai Life, with Rs. 1,650 cr revenue in FY25, 26% EBITDA margin and 30% growth is ruling at a PE of 70x while Alivus Life with Rs. 2,400 cr topline and low single digit growth is trading at a PE of 25x. Thus, Anthem IPO is priced in line with its industry-leading margins and high growth visibility.
Anthem’s m cap of Rs.32,000 cr, will make it larger than all the 3 above peers and <11% dilution is likely to attract strong institutional interest in the IPO and even post-listings.
The proposed 200% US tariffs on pharma may appear negative for the sector, but company believes India is the best and much-needed alternate to China, which is 90% of global CRDMO market.
15th Jul 2025 at 09:03 am
14th Jul 2025 at 08:50 pm
14th Jul 2025 at 08:30 pm