Valiant Laboratories IPO: All You Need To Know

Valiant Laboratories launched its initial public offering on Sept. 27. The IPO issue will close on Oct. 3.

The active pharmaceutical ingredient manufacturer's IPO comprises a fresh issue of 1.089 crore shares, amounting to up to Rs 152.46 crore. The company does not have any offer for sale.

The company intends to establish a new facility in Bharuch, Gujarat, over an area of 57,766 square metres. The project comprises the manufacturing of specialty chemicals such as ketene and diketene derivative products, which are key raw materials for making paracetamol.

• Issue Opens: Sept. 27

• Issue Closes: Oct. 3

• Fresh Issue Size: Rs 152.46 crore

• Shares for Fresh Issue: 1,08,90,000 shares

• Total Issue Size: Rs 152.46 crore

• Price Band: Rs 133 –140 per share

• Lot Size: 105 Shares

• Face Value: Rs 10 per share

• Listing: BSE and NSE

The company has not undertaken any pre-IPO placement.

The company is a bulk drug manufacturing company with a focus on manufacturing paracetamol. Bulk drugs and APIs serve as raw materials for making finished dosage formulations. Paracetamol is one of the most commonly taken pain-relief medicines worldwide.

The company originally started off as a partnership in 1980 and commenced manufacturing paracetamol by late 1982. Their manufacturing facility is located in Palghar, Maharashtra, spread over an area of 2,000 sq ft. The installed capacity of the plant is 9,000 MT per annum.

Paracetamol has several applications, such as in the treatment of headaches, muscle aches, arthritis, back aches, toothaches, colds, and fever. They manufacture paracetamol in various grades, such as IP, BP, EP/USP, as per the pharmacopoeia requirements of customers.

The paracetamol API industry (domestic consumption exports) grew from Rs. 22 billion in FY17 to Rs. 39 billion in FY23.

• Capital Expenditure via subsidiary, Valiant Advanced Sciences: Rs 80 crore

• Investment in subsidiary's working capital: Rs 45 crore

• Valiant Advanced Sciences is yet to commence operations, and the investment required towards working capital is based on certain assumptions and management estimates.

• The company operates out of a single product manufacturing facility in Palghar and thus faces a concentration risk.

• The company is heavily dependent on a single product, and any changes in the paracetamol API industry could adversely affect their revenues.

• The company has a limited number of suppliers, the top 10 of which have supplied 99.62% of the total purchases done in fiscal 2023.

• Majority of the operating income is derived from the domestic markets. In FY23, 99.61% of operating revenue was from customers in India.

• The business is subject to strict quality requirements, regular inspections and audits by customers. Any failure to comply with quality standards may lead to cancellation of existing and future orders.