Onyx Biotec Limited, an established player in the Indian pharmaceutical industry, launched its IPO on November 13, 2024, with the subscription period running until November 18, 2024. This IPO, amounting to ₹29.34 crores, is a fixed price issue with shares offered at ₹58-₹61 per equity share. The company, which specializes in generic and branded pharmaceutical products, including Water for Injection (WFI), Dry Powder Injections, and Dry Powder Syrups, has been in operation since 2009.

IPO Key Details and Market Metrics

Onyx Biotec’s IPO consists solely of a fresh issue of 48.1 lakh shares, targeting a market capitalization of ₹110.60 crores at the upper price band. Horizon Management Private Limited is the book-running lead manager, with MAS Services Limited serving as the registrar. The IPO has received a favorable reception, subscribed 5.34 times as of midday on November 14, 2024.

The IPO is set up with a minimum lot size of 2,000 shares, translating to a minimum investment of ₹1,22,000 for retail investors. High-Net-Worth Individuals (HNIs) are required to purchase a minimum of two lots.

Objectives of the IPO

Proceeds from the IPO will be directed toward:

1. Upgrading the Manufacturing Unit I for large-volume parental intravenous products, estimated at ₹607.70 lakhs.
2. Setting up a high-speed packaging line for Unit II, focusing on dry powder injections, costing ₹124.05 lakhs.
3. Prepayment or repayment of loans totaling ₹1,200 lakhs to improve the financial position.
4. General corporate purposes to support expansion.

Financial Performance and Valuation

Onyx Biotec’s recent financials show steady growth:

• Revenue: Increased from ₹3,961.65 lakhs in FY23 to ₹5,387.43 lakhs in FY24.
• EBITDA: Grew from ₹459.25 lakhs in FY23 to ₹840.77 lakhs in FY24.
• Profit after Tax (PAT): Improved to ₹303.16 lakhs in FY24 from ₹184.46 lakhs in FY23.

At a pre-issue EPS of ₹2.54 and post-issue EPS of ₹1.67, the pre-issue P/E ratio stands at 24.01x, while the post-issue P/E ratio is 36.52x. The company’s ROCE for FY24 is 10.58% and RoE is 12.19%, indicating a fair IPO valuation.

Grey Market Premium (GMP) and Market Sentiment

As of November 14, the Grey Market Premium (GMP) is ₹0, signaling limited speculative demand. GMP often provides early insights into investor sentiment but is not a reliable indicator for final market performance. The Onyx Biotec IPO, with moderate financial metrics, may appeal to investors with a focus on pharmaceutical sector growth rather than immediate listing gains.

Allotment and Listing

The allotment is scheduled to be finalized on November 19, 2024, and investors can check the status through the registrar’s website. The listing on the NSE SME exchange is planned for November 21, 2024.

Management and Growth Prospects

Onyx Biotec, under the leadership of Sanjay Jain and Naresh Kumar, boasts a skilled management team and a robust business model. With experience spanning 16 years in the pharmaceutical industry, the founders have positioned the company to leverage growth opportunities in both generic and branded pharmaceuticals.

While Onyx Biotec’s IPO might not appeal to speculative investors seeking listing gains, the company’s long-term prospects in a growing pharmaceutical market could offer stable returns. Potential investors are advised to evaluate their financial goals, particularly considering the current market conditions and Onyx Biotec’s industry position.

The Upcoming IPOs in this week and coming weeks are Rosmerta Digital, NTPC Green, Avanse Financial and Nisus Finance.

The Current active IPO are  Mangal Compusolution, Black Buck, and Onyx Biotec.

For more insights into financial trends , visit our Top News Headlines. You can also explore investment opportunities in the market and apply for upcoming IPOs through our Best IPO to Apply Now section.