Amanta Health IPO review

•    This company is engaged in developing/manufacturing/marketing diverse range of sterile liquid pharma products.
•    It posted almost static top lines for the reported periods.
•    It suffered for FY23 and FY24 on account MAT incentive reversals and other related adjustments.
•    It is operating in a highly competitive and fragmented segment.
•    Based on its recent financial data, the issue appears exorbitantly priced.
•    Only well-informed/cash surplus investors may park moderate funds for medium term/ others can stay away.

ABOUT COMPANY:
Amanta Healthcare Ltd. (AHL) is a pharmaceutical company engaged in developing, manufacturing and marketing a diverse range of sterile liquid products - parenteral products, being packed in plastic container with Aseptic Blow-Fill-Seal (“ABFS”) and Injection Strech Blow Moulding (“ISBM”) technology. It manufactures large volume parenterals (“LVPs”) and small volume parenterals (“SVPs”) in six therapeutic segments. In addition to that, the company also manufactures medical devices. 

AHL manufactured fluid therapy - (IV Fluid), formulations, diluents, ophthalmic, respiratory care and irrigation solutions in therapeutic segment and products like irrigation, first-aid solution, eye lubricants etc. in medical device segment. It offers wide range of closure systems, such as nipple head, twist-off, leur-lock and screw types and container fill-volume ranging from 2ml to 1000 ml. It markets products through three strategic business units namely (a) national sales, (b) international sales and (c) product partnering with various foreign and Indian pharmaceutical companies. It manufactures diverse generics product portfolio of over 45 products and market them under own brands in the Indian market through a network of over 320 distributors and stockists. 

The company sells its products in various countries including the Africa, Latin America, UK and the Rest of the world. The Company’s products are currently registered with 19 countries and have a compliance track record with a range of regulatory regimes across these markets. During the Fiscal 2025, it exported branded products to 21 countries. In product partnering, it undertakes manufacturing for various pharmaceutical companies. Its international sales business covers, advanced market countries and emerging market countries. As on the date of this Red Herring Prospectus, it has a portfolio of 47 products registered across 120 international jurisdictions. Its product partnering business include commercial large-scale manufacturing of generic products. As of March 31, 2025, it had 1718 employees on its payroll (including 1166 contract employees).

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO for 10000000 equity shares (worth Rs. 126.00 cr. at the upper cap). The company has announced a price band of Rs. 120 – Rs. 126 per equity shares of Rs. 10 each. The issue opens for subscription on September 01, 2025, and will close on September 03, 2025. The minimum application to be made is for 119 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE and NSE. The issue constitutes 25.75% of the post-IPO paid up equity capital. From the net proceeds of the fresh issue, the company will utilize Rs. 70.00 cr. for capex on expansion for setting up new manufacturing line, Rs. 30.13 cr. for capex on plant and machinery, and the rest for general corporate purposes.

The sole Book Running Lead Manager (BRLM) to this issue is Beeline Capital Advisors Pvt. Ltd., while MUFG Intime India Pvt. Ltd. is the registrar to the issue. Beeline Group’s Spread X Securities Pvt. Ltd. is a syndicate member.

The company has issued/converted initial equity shares at par value. It issued further equity shares in the price range of Rs. 15.00 – Rs. 100.00 per share between March 1995, and July 2024. It has also issued bonus shares in the ratio of 1 for 2 in November 1996. The average cost of acquisition of shares by the promoters is Rs. 0.00, Rs. 10.00, Rs. 13.93, Rs. 21.79, and Rs. 23.48 per share. 

Post-IPO, its current paid-up equity capital of Rs. 28.83 cr. will stand enhanced to Rs. 38.83. cr. Based on the upper cap of the IPO price band, the company is looking for a market cap of Rs. 489.25 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit/ - (loss), of Rs. 262.70 cr. / Rs. – (2.11) cr. (FY23), Rs. 281.61 cr. / Rs. 3.63 cr. (FY24), and Rs. 276.09 cr. / Rs. 10.50 cr. (FY25). While its top line remained almost static, its bottom line posted loss to profit from FY23 to FY25. Its higher debt-equity ratio of 2.02 raise alarm.

According to the management, reversal of MAT credits and other amortization adjustments, it suffered losses for FY23, and lower net for FY24. As such provisioning are over, it has marked higher net and the trends will continue in coming years. On completion of proposed expansion in capacities, it will achieve higher top and bottom lines going forward.

For the last three fiscals, the company has posted an average EPS of Rs. 2.18 and an average RoNW of 6.71%. The issue is priced at a P/BV of 3.77 based on its NAV of Rs. 33.43 as of March 31, 2025, and at a P/BV of 2.20 based on its post-IPO NAV of Rs. 57.27 per share (at the upper cap).

If we attribute FY25 super earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 46.67. Based on FY24 earnings, the P/E stands at 134.04. The issue appears exorbitantly priced.

The company has posted PAT margins of – (0.82) % (FY23), 1.30% (FY24), 3.86% (FY25), and RoCE margins of 12.19%, 12.76%, 13.72%, respectively for the referred periods.

DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It has adopted a dividend policy in July 2024, based on its financial performance and future prospects. However, it paid dividends on preference shares ranging from 0.01% to 10% for the reported periods.

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown Denish Chem, as its listed peer. It is trading at a P/E of 15.4 (as of August 26, 2025). However, they are not truly comparable on an apple-to-apple basis. This compare appears to be an eyewash.

MERCHANT BANKER’S TRACK RECORD:
The BRLM associated with this offer has handled 58 public issues in the past three fiscals, out of which 2 issues closed below the issue price on listing date.