IPO listed on 6 Oct'23
Valiant Laboratories Ltd
Minimum Investment
₹ 14,700 / 105 shares
Grey market premium
₹ 0
Issue price
₹ 140
Listing price
₹ 162
Listing gains
22 (16%)
Listing on
Oct 6, 2023
Our Verdict:
Avoid
- Although the company displays a steady growth in revenue and maintains impressive return ratios, there's a distinct decline in its profit margins and return metrics. Additionally, its reliance on just one product for its revenue is alarming. These factors, combined with the risks highlighted below, raise significant concerns.
- Therefore, it is advisable for investors to monitor the company's performance over the next two quarters and evaluate the progress on its expansion proposals before making any investment commitments.
About the company
Founded in
17 Oct'80
Managing director
Santosh Shantilal Vora
- Valiant Laboratories Ltd (Valiant) specializes in the production of Active Pharmaceutical Ingredient (API) or Bulk Drugs, with a particular emphasis on Paracetamol manufacturing. It produces Paracetamol in a variety of standards, including IP/BP/EP/USP.
- The company's production facility is located at Palghar in Maharashtra, boasting a combined annual installed capacity of 9,000 MTPA.
STRENGTHS
- Steady Growth: Between FY21-23, Valiant showcased impressive financial growth, registering a CAGR of 35% in revenue.
- Solid Financial Metrics: The three-year average Return on Equity and Return on Capital Employed are 39% and 43%, respectively. The company also reported positive cash flow from operations in the last three financial years.
- Fair Valuations: In terms of valuation, the IPO seems to have a fair pricing with a post-issue PE multiple of 21x.
RISK FACTORS
- Decreasing Profit Trends: Between FY21 and FY23, the EBITDA saw a negative CAGR of 16%, and the net profit also declined at a CAGR of 3%.
- Diminishing Return Ratios: While the return ratios remain impressive, there's a clear decline in these metrics over time. In FY21, Return on Equity was 48.10%, which reduced to 34.36% in FY22 and further decreased to 33.73% in FY23. Similarly, the Return on Capital Employed was 70.86% in FY21 but dropped significantly to 35.75% in FY22 and further plummeted to 22.76% in FY23.
- Heavy Reliance on a Single Product: Valiant's operations largely hinge on the production and sales of one product - paracetamol. Being a single-product manufacturer makes the company vulnerable. A surge in popularity for alternative medications like ibuprofen or diclofenac sodium could lead to decreased demand for paracetamol, potentially harming Valiant's business, profitability, and overall revenue.
- Investment in Subsidiary: A substantial part of the IPO funds is set aside for investing in Valiant Advanced Sciences Pvt Ltd, a subsidiary that hasn't started commercial activities yet. Any delays or unexpected expenses in this subsidiary's projects might adversely affect its financial health.
Issue details
Issue type
Mainstream
Issue size
₹ 152.46 crore
Fresh Issue
₹ 152.46 crore
OFS
₹ -
Price range
₹ 133 - 140
Lot size
105 shares
Issue Objective
Net proceeds from the issue will be utilised towards:
- Investment in its wholly-owned subsidiary for part-financing its capex requirements in relation to setting up a new manufacturing facility for specialty chemicals in Bharuch and funding its working capital requirements;
- General corporate purposes.
Dates
Bidding open
27 Sep'23
Bidding close
3 Oct'23
Allotment date
4 Oct'23
Refund date
5 Oct'23
Listing
6 Oct'23
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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