Onyx Biotec IPO Opens on November 13: Check Details

Onyx Biotec

Onyx Biotec Limited IPO: Everything You Need to Know

The upcoming Initial Public Offering (IPO) of Onyx Biotec Limited, a pharmaceutical company specializing in sterile water for injections and contract manufacturing services, is poised to raise INR 29.34 crore.

This IPO presents an exciting opportunity for potential investors looking to invest in the growing pharmaceutical sector.

Below is an in-depth overview of the IPO and key details investors should be aware of before making their investment decisions.

About Onyx Biotec Limited

Onyx Biotec Limited is a well-established player in the Indian pharmaceutical industry, with a focus on manufacturing sterile water for injections, dry powder injections, and dry syrups.

The company operates two state-of-the-art manufacturing units located in Solan, Himachal Pradesh, which play a pivotal role in its production capacity.

• Unit 1: Produces 638,889 sterile water units daily.
• Unit 2: Manufactures 40,000 dry powder injections and 26,667 dry syrup units per day with a single-shift operation.

Onyx Biotec’s diverse product range and extensive manufacturing capacity make it a prominent player in the pharmaceutical contract manufacturing market.

The company’s client base includes some of India’s leading pharmaceutical companies, such as Hetero Healthcare, Mankind Pharma, Sun Pharmaceutical Industries, and Reliance Life Sciences, highlighting its strong market presence and credibility.

Onyx Biotec IPO Issue Size

Onyx Biotec aims to raise INR 29.34 crore through this IPO. The offering will consist entirely of fresh shares, with 48.1 lakh shares being issued as part of the issue.

The company intends to use the proceeds from the IPO to enhance its production capabilities, reduce debt, and support overall business growth.

Onyx Biotec IPO Price Band

The IPO will be offered within a price band of INR 58 to INR 61 per share. This pricing range positions the company attractively for both retail and institutional investors.

The minimum lot size for retail investors is 2000 shares, meaning a minimum investment of INR 1,22,000.

This provides a clear picture for retail investors about the level of commitment required to participate in the offering.

IPO Issue Structure

The IPO issue structure is designed to ensure a balanced allocation across different categories of investors. The structure is as follows:

• 50% of the offer will be allocated to Qualified Institutional Buyers (QIBs).
• 35% will be reserved for Retail Investors.
• 15% will be allocated to Non-Institutional Investors (NIIs).

This distribution ensures that both institutional and retail investors have a fair opportunity to participate in the IPO, reflecting a broad-based investor interest.

IPO Timeline and Listing

The Onyx Biotec IPO will follow the timeline below:

• IPO Opening Date: November 13, 2024
• IPO Closing Date: November 18, 2024
• Share Allotment Date: November 19, 2024
• Refunds or Shares Credit to Demat Accounts: November 20, 2024
• Listing Date: November 21, 2024, on NSE SME.

The IPO is expected to generate significant interest from both retail and institutional investors, given the company’s strong growth trajectory and the favorable pricing range.

Objectives of the IPO

The company plans to utilize the funds raised from the IPO for the following purposes:

• Upgrade Manufacturing Unit 1: Improve the capacity and capabilities of its existing manufacturing unit.
• Establish High-Speed Cartooning Packaging Line in Unit 2: To enhance the packaging efficiency for dry powder injections.
• Repay Existing Debts: Strengthen the company’s financial position by reducing debt.
• Fund General Corporate Activities: Support working capital needs and general operational activities.

These objectives demonstrate Onyx Biotec’s commitment to scaling its operations and improving profitability, making it an attractive proposition for investors.

Financial Performance of Onyx Biotec

Onyx Biotec has demonstrated strong financial growth in recent years. For the fiscal year ending March 31, 2024:

• Revenue: INR 53.87 crore, representing a growth of 35.99% compared to the previous year.
• Profit After Tax (PAT): INR 3.03 crore, reflecting a substantial increase of 64.35% year-over-year.

This solid financial performance underscores the company’s ability to generate consistent revenue growth and deliver value to its stakeholders, making it an appealing investment opportunity.

Onyx Biotec IPO GMP (Grey Market Premium)

As per market analysts, the Grey Market Premium (GMP) for Onyx Biotec’s IPO is around INR 5, which represents an 8.2% premium over the upper price band of INR 61.

The positive GMP indicates strong investor interest in the IPO, suggesting the potential for favorable listing gains post the public offering.

Lead Manager for the IPO

Horizon Management Private Limited has been appointed as the book-running lead manager for the Onyx Biotec IPO.

Horizon Management will play a crucial role in managing the IPO process, including marketing, distribution, and ensuring a smooth launch of the offering.

Registrar for the IPO

The registrar for the Onyx Biotec IPO is Mass Services Limited, which will be responsible for the IPO’s administrative functions, including handling the share allotment process, investor queries, and ensuring the smooth transfer of shares to investors’ demat accounts post-allotment.

Key Takeaways for Investors

• Industry: Pharmaceutical sector, with a focus on contract manufacturing of sterile water, dry powder injections, and dry syrups.
• IPO Size: INR 29.34 crore, entirely fresh shares.
• Price Band: INR 58-61 per share, with a minimum investment of INR 1,22,000 for retail investors.
• Strong Financials: Revenue of INR 53.87 crore in FY24, with a robust PAT growth of 64.35%.
• Promising Market Interest: Grey Market Premium indicates strong demand for the IPO.

Given its healthy financial track record, ambitious growth plans, and strategic use of IPO proceeds, Onyx Biotec presents an appealing investment opportunity for those looking to enter the pharmaceutical space.

However, as with any investment, it is essential for potential investors to conduct their due diligence and assess the risks before making any commitments.