IPO Note : Anthem Biosciences Ltd by Geojit Financial Services Ltd
A fully integrated CRDMO player
Anthem Biosciences Ltd (ABL), established in 2006, is a leading Contract Research, Development, and Manufacturing Organization (CRDMO) catering to global biotechnology and pharmaceutical companies. The company provides comprehensive, end-to-end solutions spanning drug discovery, development, and manufacturing, with capabilities across both chemical and biological domains. The CRDMO segment remains the company’s core business, contributing 82% of total revenue, while the remaining 18% is derived from specialty ingredients such as enzymes, probiotics, and biosimilars. Europe contributed the largest revenue in FY25, accounting for 54.6%, followed by North America at 26%, India at 16.6%, and the rest of Asia at 2.4%.
* The Indian CRDMO industry is expected to grow at a 13.4% CAGR from 2024–2029 to reach US$15.4 billion, outpacing the global rate of 9.1%, driven by stronger domestic capabilities, the proposed US BIOSECURE Act (restricting US companies from using Chinese biotechnology players), and the China+1 strategy.
* ABL delivered stable financial growth, with revenue growing at a 32% CAGR between FY23-25, reaching Rs.1,845cr in FY25.
* In FY25, ABL achieved robust financial performance, posting an EBITDA margin of 36.4%, a PAT margin of 24.5%, and RoE of 18.7%, indicating superior operational efficiency relative to its peers.
* Anthem’s pipeline comprises 242 diverse projects, including 68 in the discovery stage, 145 in early development, and 16 in late-stage development.
* ABL has established a strategic partnership with DavosPharma, an affiliate of Portsmouth LLC (a 3.74% stakeholder in ABL), as its U.S. sales partner. This collaboration has enabled the addition of 89 U.S. customers over the past three fiscal years.
* Anthem targets underserved small biotech firms through a cost-effective fee-forservice (FFS) model, where clients pay upon delivery. This approach yields better margins compared to the traditional full-time equivalent (FTE) model, which bills based on work hours.
* ABL is ramping up capacity with Unit II (130kL, 54kL completed), Unit III now operational, Unit IV under construction for both small and large molecules, and Unit V planned in Hosur. By FY26, fermentation and synthesis capacities are expected to increase to 182kL and 425kL, respectively, from 142kL and 270kL in FY25.
* At the upper price band of ?570, ABL is valued at a P/E of 71x (FY25), which is fair compared to industry peers. The company is well positioned to benefit from the growth of the Indian CRDMO industry, cost advantages, and global supply chain shifts. Its focus on emerging biotech clients, expanding manufacturing capacity, and long-standing customer relationships further support its growth prospects. Hence, we recommend a ‘Subscribe’ rating on a long-term basis.
Purpose of IPO
The issue consists of an OFS of Rs.3,395cr. The object of the offer is to achieve the benefits of listing the equity shares on the stock exchanges.
Key Risks
* Revenue depends on success of molecules; clinical failures can impact earnings.
* High export dependence, with ~83% of revenue derived in FY25, expected to moderate in the long term.
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SEBI Registration Number: INH200000345
