Anlon Healthcare shares make a muted D-Street debut, shares list at 1% premium over IPO price

Shares of Anlon Healthcare witnessed a flat debut on Wednesday, listing at Rs 92 on NSE and Rs 91 on the BSE, just 1% above its IPO price.

The IPO of Rajkot-based pharmaceutical intermediates and active pharmaceutical ingredients (API) manufacturer was subscribed to nearly 7 times. The allotment for the IPO was finalised on September 1.

IPO structure and objectives

The Rs 121 crore issue consisted solely of a fresh issue of 1.33 crore shares. The company plans to use the proceeds to fund expansion, prepay borrowings, and meet general corporate needs.

Company details

Anlon has built a sizable product portfolio, with 65 products already commercialised, 28 in pilot stages, and 49 under lab testing. The company runs a 400 MTPA facility in Rajkot, which clocked 84% capacity utilisation in FY25, a sharp improvement from 38% in FY24.

Plans are in motion to set up a new manufacturing plant nearby, boosting installed capacity to 700 MTPA. The expansion will allow Anlon to handle both existing APIs and new intermediates, positioning it to capture growing domestic and export demand.

Financial growth

The company has displayed consistent improvement in financial performance. Revenue jumped 81% in FY25 to Rs 120 crore , while net profit more than doubled to Rs 205 million. Profit margins have expanded sharply, with EBITDA margin rising to 26.9% and PAT margin to 17.1%, compared to 18.5% and 5.2% in FY23.

At the upper end of the price band, Anlon is valued at a P/E of 19x FY25 earnings, with an EV/EBITDA multiple of 16.7x and market cap of Rs 483.6 crore post-issue.

Anand Rathi said the IPO was fully priced, but recommended subscribing for the long term given the strong fundamentals and growth runway.

Strengths and Weaknesses

Anlon is among the few Indian manufacturers of loxoprofen sodium dihydrate, an API widely used in pain and inflammation management. Regulatory approvals from Brazil, Japan, and China further strengthen its export prospects.

The company also benefits from high entry barriers: lengthy customer approval cycles and stringent compliance norms reduce the risk of churn and create sticky client relationships.

However, risks remain. The company has a limited operating history, and any shutdown of its single facility could impact output. Past regulatory halts, such as one from the Brazilian health authority, underscore the importance of compliance vigilance.

Outlook

For long-term investors, Analon's expanding portfolio, high utilisation, and strong order book backed by regulatory approvals provide a compelling case. But analysts say valuation comfort remains limited, making it a cautious bet in the near term.

Interactive Financial Services acted as the book-running lead manager, with KFin Technologies as registrar.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)