IPO closes on 29 Aug'25
Anlon Healthcare Ltd
Minimum Investment
₹ 14,924 / 164 shares
Our Verdict:
Avoid
- Anlon Healthcare Ltd’s (AHL) IPO provides exposure to a niche pharmaceutical chemical manufacturer with a promising product pipeline and strong profitability growth.
- That said, certain risks cannot be ignored. Nearly 78% of revenue is concentrated in just 10 customers, creating significant dependence on a few key accounts. Operating cash flows have remained negative over the past three years, raising concerns around liquidity management. In addition, reliance on a single manufacturing facility in Rajkot exposes the company to geographic and operational disruptions.
- While the proposed capacity expansion is expected to support growth, the benefits will depend on timely execution, regulatory compliance and demand realisation from both domestic and international customers. Any delays or setbacks could affect the growth trajectory.
- In terms of valuation, the issue appears attractively priced with a P/E multiple of ~14x based on FY25 earnings.
- Nonetheless, considering the combination of execution-related uncertainties and the current volatility in equity markets, long-term investors may prefer to adopt a wait-and-watch approach and reassess the stock post-listing, once there is greater clarity on operational performance and broader market conditions.
About the company
Founded in
19 Nov'13
Managing director
Punitkumar Rasadia
- AHL is a chemical manufacturing company focused on pharmaceutical intermediates and active pharmaceutical ingredients (APIs). Pharma intermediates serve as raw materials for APIs, which are then used in tablets, capsules, ointments, syrups and other pharmaceutical formulations. These ingredients also find applications in nutraceuticals, personal care and animal health products.
- In FY25, APIs contributed 40.27% to revenue, Finished Dosage Formulations 53.12%, Nutraceuticals 6.61% and other segments 0.01%. As of August 2025, AHL’s portfolio comprises 65 commercialized products, 28 in pilot stage and 49 at laboratory testing or scale-up stage.
STRENGTHS
- Specialized Product: AHL is among the few Indian manufacturers of loxoprofen sodium dihydrate, a widely used API for managing pain and inflammation in conditions such as rheumatoid arthritis, osteoarthritis, frozen shoulder, lower back pain, post-surgical recovery and dental procedures.
- Financial Performance: AHL delivered strong growth between FY23 and FY25, with EBITDA rising at a 37% CAGR and net profit at 52% CAGR, even though revenue expanded at a modest 2% CAGR.
- Solid Return Ratios: AHL demonstrates strong operational efficiency with a with a Return on Net Worth (RoNW) of 25.5% and a Return on Capital Employed (RoCE) of 21.9% in FY25.
- Healthy Profit Margins: Profitability improved significantly, as EBITDA margin jumped from 18.5% in FY23 to 26.9% in FY25 while net profit margin surged from 5.2% to 17.1%.
RISK FACTORS
- Client Concentration: In FY25, approximately 78% of AHL’s revenue came from the top 10 customers. Any loss or reduction in orders from these key clients could significantly affect financial performance.
- Cash Flow Concerns: AHL has reported negative operating cash flows for the last three fiscal years. Continued negative cash flow could stress liquidity, increase reliance on external funding and jeopardize business continuity.
- Single-Site Dependency: AHL operates only one manufacturing facility in Rajkot, Gujarat, making it vulnerable to localized operational disruptions, regulatory changes or natural calamities.
- Regulatory Risks: AHL’s business is exposed to stringent quality standards and frequent client audits. Non-compliance could lead to order cancellations, warranty claims and reputational damage. For instance, in FY24, operations were halted for four months following directives from the Brazilian Health Regulatory Agency, disrupting production continuity.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 121.03 crore
Fresh Issue
₹ 121.03 crore
OFS
₹ -
Price range
₹ 86 - 91
Lot size
164 shares
Issue Objective
The net proceeds from the fresh issue will be utilized for:
- Funding capital expenditure to expand manufacturing operations;
- Repayment of outstanding secured borrowings;
- Meeting working capital requirements; and
- General corporate purposes.
Dates
Bidding open
26 Aug'25
Bidding close
29 Aug'25
Allotment date
1 Sep'25
Refund date
2 Sep'25
Listing
3 Sep'25
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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