Onyx Biotec Ltd., founded in 2009, is a leading pharmaceutical company in India engaged in the manufacture and distribution of generic and proprietary pharmaceutical products. The company produces a variety of products such as Water for Injection (WFI), Dry Powder Injections, and Dry Powder Syrup. With a significant presence in the pharmaceutical manufacturing sector, Onyx Biotec aims to expand its operations with this IPO.

IPO Details and Timeline

The Onyx Biotec IPO is a fixed-price issue valued at ₹29.34 crores, with a price band of ₹58 to ₹61 per share. The issue consists of a fresh issue of 48.1 lakh shares, and the IPO subscription period will run from November 13 to November 18, 2024. The listing date for the shares is expected to be November 21, 2024 on the NSE SME.

• Price Band: ₹58 to ₹61 per share
• Lot Size: 2,000 shares
• Minimum Investment for Retail Investors: ₹1,22,000
• Minimum Investment for HNIs: ₹2,44,000

Objectives of IPO Proceeds

The proceeds from the fresh issue will be utilized for:

1. ₹607.70 Lakhs: Upgrading the existing manufacturing unit to produce large volume parentals for intravenous use.
2. ₹124.05 Lakhs: Setting up a high-speed cartooning packaging line at manufacturing unit II for Dry Powder Injections.
3. ₹1,200.00 Lakhs: Prepayment or repayment of certain loans.
4. General Corporate Purposes: For the company’s operational and business expansion needs.

Business and Financial Overview

Onyx Biotec has experienced strong growth in its operations, with revenues from operations for FY24 totaling ₹5,387.43 lakhs, an increase from ₹3,961.65 lakhs in FY23 and ₹4,498.09 lakhs in FY22. The EBITDA for FY24 stands at ₹840.77 lakhs, which is a substantial increase from ₹459.25 lakhs in FY23. The Profit After Tax (PAT) for FY24 was ₹303.16 lakhs, a solid growth from ₹184.46 lakhs in FY23.

Key financial metrics for the company include:

• Pre-issue EPS: ₹2.54
• Post-issue EPS: ₹1.67
• Pre-issue P/E ratio: 24.01x
• Post-issue P/E ratio: 36.52x
• Industry P/E ratio: 75.10x
• ROCE for FY24: 10.58%
• ROE for FY24: 12.19%

These numbers suggest that Onyx Biotec is fairly priced in comparison to industry standards, although it may be less appealing for significant returns compared to high-growth pharmaceutical IPOs.

Grey Market Premium (GMP) Insights

The Grey Market Premium (GMP) for the Onyx Biotec IPO is ₹0, indicating that there is no speculative trading or market anticipation for a significant listing gain. GMP is often unreliable and driven by demand-supply factors outside the official market.

Live Subscription Status

As of November 14, 2024, the Onyx Biotec IPO has been subscribed 9.11 times on its second day of the subscription period. Real-time subscription updates are available on the NSE website.

Anchor Investors Report

Onyx Biotec raised ₹8.33 crores from Anchor Investors, who were allotted 13,66,000 shares at a price of ₹61 per share. These shares are allocated from the QIB portion of the IPO. The participation of Anchor Investors typically reflects confidence in the company’s prospects.

Allotment Process

The allotment date for the Onyx Biotec IPO is scheduled for November 19, 2024, and investors can check the allotment status on the registrar’s website. By entering their application number, PAN, or DP Client ID, investors can quickly find out if they have been allotted shares.

Review and Recommendation

Considering Onyx Biotec’s financial growth, the IPO valuation is reasonably priced, but the GMP signals that the IPO may not offer significant listing gains. The P/E ratios are lower than the industry P/E, which could make the stock less attractive for short-term investors.

We recommend investors to avoid the Onyx Biotec IPO for listing gains and long-term investment purposes, unless they have a strong belief in the company's future growth based on its manufacturing upgrades and industry positioning.

Conclusion

Onyx Biotec Ltd. presents an opportunity to invest in a growing pharmaceutical company. However, its pricing and GMP suggest cautious optimism. Investors should weigh the long-term potential of the company's business strategy before making investment decisions. Stay updated on subscription status and allotment details as the IPO process unfolds.

The Upcoming IPOs in this week and coming weeks are Lomosaic India, C2C Advanced System, Rosmerta Digital, NTPC Green, Avanse Financial and Nisus Finance.

The Current active IPO are Zinka Logistics Solution (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.