Vanta Bioscience BSE SME IPO review (Avoid)

Vanta Bioscience Ltd. (VBL) is a preclinical contract research organization, offering a host of preclinical safety assessment services for clientele from Pharmaceutical, Medical Devices, Nutraceuticals, Feed Additive, Biotech, Agrochemicals, Cosmetics, and Chemical industries. In addition it also provides risk assessment services for evaluating the safety of the Active Pharmaceutical Ingredients (API), excipients, extractable and leachable including pharmaceutical impurities resulting due to manufacturing process or due to degradation of the product. VBL also provides expert services for determination of health based exposure limits (e.g. permitted daily exposure (PDE) or allowable daily exposure (ADE) including occupational exposure limits (OEL) for pharmaceutical manufacturers.

One of the major services of VBL is conducting variety of in vitro (cell, tissue and organisms) and in vivo (animal) toxicology studies for its diverse clients as per various regulatory requirements from across the world. Toxicology is a branch of biology, chemistry, and pharmacology concerned with the study of the adverse effects of chemicals on living organisms. It also studies the harmful effects of chemical, biological and physical agents in biological systems that establish the extent of damage in living organisms. The relationship between dose and its effects on the exposed organism is of high significance in toxicology. Toxicology and safety assessment are sometimes used interchangeably and considered as synonymous.

To part finance its additional working capital and general corpus fund needs, VBL is coming out with a maiden IPO of 1512000 equity share of Rs. 10 each at a fixed price of Rs. 50 per share to mobilize Rs. 7.56 crore. Issue opens for subscription on 25.09.17 and will close on 27.09.17. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Inventure Merchant Banker Services Pvt. Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 26.40% of fully diluted post issue paid up equity capital of the company. Having issued initial equity at par, it issued further equity at a price of Rs. 50 per share. Post issue its current paid up equity capital of Rs. 4.22 crore will stand enhanced to Rs. 5.73 crore.

As the company has not carried any operations till 31.03.17, it has no track record of performance. Thus parameters on P/E and RoNW are not available. Due to issue at premium, it has some reserves on that count and on the basis of same the issue is priced at a P/BV of around 3. Issue is highly priced with no performance track record. It is trying to compare with Syngene, Sun Pharma and Suven Life as its peers.

On merchant banker’s front, this is the second mandate from its stable in past three years and the only listing that took place for Univastu marked erratic movement on the day of listing with opening at Rs. 48 against offer price of Rs. 40 and closed at Rs. 40.20 on the day of listing.

Conclusion: Simply avoid this issue as it has no track records.