Anthem Biosciences IPO — Should You Subscribe Or Not? Read Anand Rathi's Report

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Anand Rathi Report

Anthem Biosciences Ltd. is set to launch its IPO on July 14 and the offer closes for subscription on July 16.

Anthem Biosciences is a fully integrated, innovation-led and technology-driven CRDMO offering end-to-end solutions across the drug discovery, development, and manufacturing value chain.

The company has fixed the price band in the range of Rs 540 to Rs 570 per share.

The Rs 3,395 crore IPO, comprises entirely of an offer-for-sale component of 5.96 crore shares.

Investors can place bids starting from a minimum of 26 shares and in multiples thereafter.

Since the Anthem Biosciences IPO is entirely an OFS, proceeds from the offer will go directly to the selling shareholders.

JM Financial Ltd., Citigroup Global Markets India Pvt Ltd, J.P. Morgan India Pvt Ltd, Nomura Financial Advisory and Securities (India) Pvt Ltd. are the book-running lead managers for the public issue.

Valuation and outlook

Anthem biosciences is well positioned to cater in CROs and CRDMO segment the crucial players in the pharmaceutical and biotechnology industries wherein the company being niche player in with high entry barriers through its differentiated FFS model, long term relationship, strong R&D, innovation and technology driven approach across drug discovery, development and manufacturing.

The company has shown profitable track record against its peers and intend to maintain it be leveraging its integrated manufacturing and technological capabilities by focusing on building complex speciality ingredients, peptides, probiotics etc.

On valuation parse, based on annualised FY25 it is seeking PE of 70.6 times, and post issue market cap comes at Rs 3,18,673 million with this the issue is fairly priced.

We believe company has potential to continue to grow its revenue and profitability ratios compared to its peers. Hence, we give “Subscribe” rating for the issue.

Key Risks

Dependence on CRDMO Business: The company revenue is significantly dependent on demand for our CRDMO services, which accounted for 81.65% of our operational revenue in Fiscal 2025. Any adverse developments affecting their CRDMO customers or the sectors they operate in could materially impact its business performance, financial condition, and growth prospects.

Major reliance on Developmental and Commercial Manufacturing: In Fiscal 2025, developmental and commercial manufacturing accounted for 70.78% of revenue from operations and 71.90% of total project portfolio. Any setbacks in early-phase development or failure to successfully advance or manufacture commercially viable drug candidates whether due to scientific, regulatory, or external market factors beyond their control could adversely impact our revenue, project pipeline, and overall business performance.

Regulatory Compliance Risk: The Company operates in a highly regulated environment and is subject to extensive statutory and regulatory requirements. Failure to obtain, maintain, or timely renew the necessary licenses, permits, and approvals could disrupt operations and have a material adverse impact on business continuity, financial performance, and cash flows.

Patent Expiry Risk: The Company is exposed to the risk of revenue loss from manufacturing services provided to innovator pharmaceutical companies following the expiry of their patent protection. Post-patent expiry, lower-cost generic alternatives may enter the market, potentially reducing demand for the company’s services related to those original formulations.

Regulatory Inspection and Approval Risk: The Company’s manufacturing facilities are subject to regular audits and inspections by regulatory authorities and clients. Any delay or failure in obtaining necessary approvals or clearances could adversely impact operational continuity, customer relationships, and may have a material effect on the company’s financial performance and cash flows.

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