Understanding Anthem Biosciences IPO: Key Strengths and Risks

Anthem Biosciences is launching its IPO with a price band of ₹540 to ₹570 per share. The public issue is entirely an Offer for Sale (OFS), with promoters and existing shareholders divesting up to 59.6 million equity shares, aggregating to approximately ₹3,395 crore. The company has a strong global customer base, market-leading fermentation capacity, and diversified specialty ingredients portfolio, but investors should be aware of risks such as dependence on a few customers and challenges in the biotechnology industry.

Anthem Biosciences, a contract research, development, and manufacturing organization (CRDMO) specializing in fermentation-based active pharmaceutical ingredients (APIs), is set to launch its Initial Public Offering (IPO) from July 14 to 16, 2025. The IPO, an entirely Offer for Sale (OFS), aims to raise approximately ₹3,395 crore through the divestment of up to 59.6 million equity shares. The company has set a price band of ₹540 to ₹570 per share, with the upper end of the band valuing the company at over ₹31,800 crore.

Anthem Biosciences, incorporated in 2006, operates two manufacturing facilities in Karnataka, with a combined annual custom synthesis capacity of 270 kL and fermentation capacity of 142 kL as of March 31, 2025. The company is also expanding its facilities, with plans to increase its custom synthesis capacity by 130 kL at Unit II (Harohalli) and by 25 kL and 40 kL for fermentation capacity through the construction of Unit III (Neoanthem Lifesciences Pvt Ltd). The third manufacturing facility in Karnataka is under construction and expected to be operational in the first half of 2025.

The company's revenue from operations increased by 30% in FY25 to ₹1,844 crore, while its PAT (Profit After Tax) jumped by 23% to ₹451 crore. The IPO proceeds will be used for the expansion of the company's manufacturing facilities and other strategic initiatives.

Anthem Biosciences boasts a strong global customer base, with over 550 customers spread across more than 44 countries, including the United States, Europe, and Japan. The company's market-leading fermentation capacity of 142 kL is expected to reach 182 kL following the completion of its expansion activities by the first half of Fiscal 2026. Additionally, Anthem Biosciences maintains a diversified specialty ingredients portfolio, catering to the growing demand for niche specialty ingredients such as GLP-1, fermentation-based products, probiotics, enzymes, nutritional actives, vitamin analogues, and biosimilars.

However, investors should be aware of certain risks associated with Anthem Biosciences. The company's business is heavily dependent on the demand for its CRDMO services, which contributed to 81.65% of its revenue from operations in FY25. Furthermore, the biotechnology industry faces challenges such as regulatory hurdles and intense competition, which could impact the company's performance.

The IPO will be open for public subscription from July 14 to 16, 2025, with one-day bidding for anchor investors scheduled for July 11. The equity shares are expected to be listed on the BSE and NSE on July 21, 2025. The issue has been reserved for qualified institutional buyers (50%), retail investors (35%), and non-institutional investors (15%).

References:
[1] https://m.economictimes.com/markets/ipos/fpos/anthem-biosciences-sets-ipo-price-band-at-rs-530-570/share/articleshow/122333703.cms
[2] https://economictimes.indiatimes.com/markets/ipos/fpos/anthem-biosciences-sets-ipo-price-band-at-rs-530-570/share/articleshow/122333703.cms
[3] https://www.business-standard.com/amp/markets/news/thinking-of-investing-in-anthem-biosciences-ipo-know-key-risks-strengths-125071000250_1.html