Anlon Healthcare

• Anlon Healthcare is coming out with a 100% book building; initial public offering (IPO) of 1,33,00,000 shares of Rs 10 each in a price band Rs 86-91 per equity share.
• Not more than 75% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 10% for the retail investors.
• The issue will open for subscription on August 26, 2025 and will close on August 29, 2025.
• The shares will be listed on BSE as well as NSE.
• The face value of the share is Rs 10 and is priced 8.60 times of its face value on the lower side and 9.10 times on the higher side.
• Book running lead manager to the issue is Interactive Financial Services.
• Compliance Officer for the issue is Amita Chhaganbhai Pragada.

Profile of the company

Anlon Healthcare is a chemical manufacturing company engaged in manufacturing of; (i) high purity advance pharmaceutical intermediates (Pharma Intermediate) which serves as raw material/ key starting material in the manufacturing of active pharmaceutical ingredients; and (ii) active pharmaceutical ingredients (APIs) which serves as a raw material for pharmaceutical formulations in preparation of various type of Finished Dosage Formula (FDF) such as tablet, capsules, ointment, syrup etc. ingredients in nutraceuticals formulations, personal care products and animal health products. The company’s products spans across the family of pharmaceutical intermediates, active pharmaceutical ingredients, nutraceutical APIs and ingredients for personal care and veterinary API. Its active pharmaceutical ingredient products are manufactured in accordance with Indian and international pharmacopeia standards such as IP, BP, EP, JP, USP.

It is one of the few manufacturers of loxoprofen sodium dihydrate in India, which is a notable API widely used in treatment of pain/inflammation association with conditions including rheumatoid arthritis, osteoarthritis, lower back pain, frozen shoulder, neck-shoulder-arm syndrome, tooth pain or after surgery, injury or tooth extraction. In addition to the manufacturing of Pharma Intermediate and APIs in accordance with various domestic and international standards, it has recently started undertaking custom manufacturing services for complex or novel chemical compounds, tailoring the manufacturing process to meet specific customer requirements, including producing chemicals with purity levels that exceed industry standards. Its domain knowledge and expertise enables it to reduce existing impurities and employ appropriate processes to achieve the desired level of purity.

It also undertakes API development, preparation and filing of Drug Master File (DMF) in the Indian and global markets as per the pharmacopeia requirements of its customers and regulatory agencies. It has received approval for Drug Master File from (i) Brazilian Health Regulatory Agency (ANVISA, Brazil) for its API product namely, loxoprofen sodium dihydrate; (ii) National Medical Products Administration, China (NMPA, China) for its API product namely, loxoprofen sodium dihydrate; (iii) Pharmaceuticals and Medical Devices Agency, Japan (PMDA, Japan) for its API product namely, loxoprofen sodium dihydrate and loxoprofen acid. Further, the company has filed twenty-one (21) DMF with regulatory authorities of European Union, Russia, Japan, South Korea, Iran, Jordan, Pakistan amongst other and it is in process of filing DMF for approval of Ketoprofen with regulatory authority of USA and Dexketoprofen Trometamol with regulatory authority of Spain, Italy, Germany, Slovenia.

Proceed is being used for:

• Funding capital expenditure requirements for expansion of its manufacturing facility (proposed expansion)
• Full or part repayment and/or prepayment of certain outstanding secured borrowings (term loan) availed by the company
• Funding the working capital requirements of the company
• General corporate purposes

Industry Overview

Indian pharmaceutical industry is ranked as the third largest in the world, in terms of volumes of drugs manufactured and thirteenth largest, in terms of value. The Country is also the world’s largest supplier of cost effective generic drugs, and accounts for nearly one fifth of the global trade in generic drugs. India has achieved an enviable position in global generic drug market on the back of its strength in organic chemical synthesis and process engineering. Today India accounts for nearly 60% of the global vaccine production. This includes nearly 70% of WHO demand for vaccines to combat Diphtheria, Tetanus, Pertussis and BCG vaccine as well as nearly 90% of measles vaccine demand. Nearly 80% of the antiretrovirals drugs used to combat AIDS used globally is supplied by Indian pharmaceutical companies.

India’s pharmaceutical industry has displayed a consistent upward trajectory over the past few years, growing from Rs 3,281 billion in FY 2021 to an estimated Rs 4741 billion in FY 2025. Between FY 2021 - FY 2025, annual turnover in the Indian Pharmaceutical Industry increased at a CAGR of 10%. The industry has evolved from being largely generic-focused to increasingly embracing high-value segments such as biosimilars, biologics, and complex generics. India’s positioning as the “pharmacy of the world” has gained further credibility post COVID, with global recognition of its role in supplying affordable, high-quality medicines to over 200 countries. The growth momentum from FY 2021 to FY 2023 was primarily driven by post-pandemic recovery and a surge in domestic and global demand for essential medicines, vaccines, and chronic disease treatments. Government procurement for public health schemes and rising private health expenditure contributed significantly.

The Indian pharmaceutical industry is poised for a major expansion, with the the annual revenue turnover in pharmaceutical industry is expected to reach Rs 7,327 billion by FY 2030, growing by a CAGR of 10% during FY 2025-30. This anticipated growth trajectory underscores India's continuing dominance in the global pharmaceutical value chain, particularly in the generic formulations segment, where it already enjoys a leadership position. Given these developments, the Indian pharmaceutical sector is not only expected to maintain its global edge but also reinvent itself as an innovation-led, digitally integrated, and export-driven powerhouse. The journey toward Rs 7,327 billion by FY 2030 reflects not just market expansion, but a structural shift in capabilities, compliance, and competitiveness.  

Pros and strengths

Strong product portfolio and scalable business: The company is a chemical manufacturing company engaged in manufacturing of Pharma Intermediates and APIs. Its products are manufactured in accordance with pharmacopeia standards such as IP, BP, EP, JP, USP. Its product portfolio coupled with its ability to customize when required, provides it with a competitive advantage. Along with it, it has a wide range of product portfolio of 65 commercialised products and 28 products which are at the pilot stage, 49 products at laboratory testing stage. Its products spans across the family of pharmaceutical intermediates, active pharmaceutical ingredients, nutraceutical APIs and ingredients for personal care and veterinary API products.

In-house testing, quality control and quality assurance for quality control: The company is committed to maintain the quality standards through rigorous quality checks, detailed analysis, and the continuous development of process improvements. The company is supported by 4 testing laboratory for adding new generic APIs, process optimisation and test its products against the specified industry standards or customer specifications. Its testing, quality control and quality assurance team consist of 34 members out of which 24 are science graduates and post-graduates members who carry out various tests to ensure that the quality of its products meets customer requirements and established industry standards along with focus on continuous improvements to its manufacturing processes by reducing existing impurities and employ appropriate processes to achieve the desired level of purity. Its Testing, Quality Control and Quality Assurance team is also responsible for ensuring the quality of its raw material that it uses for its manufacturing of its products.

Focus on quality, environment, health and safety: Maintaining a high standard of quality for its products is critical to its continued growth. In its Manufacturing Facility, the company has put in place quality check systems that cover areas of its manufacturing process and product delivery, to ensure consistent quality, efficiency and safety of products. Its products go through various quality checks at various stages. Many of its key customers have audited and approved its Manufacturing Facility in the past, which ensures its customers regarding the continuance of quality of its facility, processes and product. It is committed towards quality, environment, health and safety in pursuant of which it has quality certifications such as ISO 9001:2015, GMP, GMP-WHO, HALAL, for its Manufacturing Facility. Further, its facility is zero liquid discharge facility equipped with an in-house effluent treatment plant for the treatment of water and multi-effect evaporator to treat wastewater.

High entry and exit barriers: As a part of the detailed approval process by potential customers or their regulatory agencies, the company required to make an extensive documentary submission like DMF about its manufacturing facility and other details including processes, quality control measures, certifications, product specifications, quality standards and regulatory compliances. Post the satisfaction of the potential customer on the documents submitted by it, the potential customer or its respective regulatory agencies conduct an on-site inspection of its Manufacturing Facility to assess its adherence to good manufacturing practices, cleanliness, equipment maintenance and regulations relating to Quality Environmental Health and Safety (QEHS). In this process they identify deviations, if any, from the standards and suggest areas for improvements. On being satisfied with all the above parameters the potential customer awards its approval or offer a conditional approval by specifying the conditions and the timelines to grant the final approval.

Risks and concerns

Maximum revenue comes from limited customers: The company derives a significant portion of its revenue from operations from few customers, with its top 10 customers contributing 77.70%, 75.71%, and 77.88% of its revenue from operations in the Fiscal 2025, Fiscal 2024, and Fiscal 2023 respectively. The loss of any one or more of such key customers for any reason including due to failure to negotiate acceptable terms of purchase order, contract renewal, negotiations, disputes with customers, adverse change in the financial condition of such customers, including due to possible bankruptcy or liquidation or other financial hardship, merger or decline in their sales, reduced or delayed customer requirements, or work stoppages could have an adverse effect on its business, results of operations and financial condition.

Limited operating history in manufacturing: The company has a limited operating history in manufacturing. Established in year 2013, it started its manufacturing operation from year 2017 onwards. Certain of its competitors may have a longer operating history and more experience to it in the businesses in which it operates. It may be unable to understand the nuances of the industry given its short operating history, particularly demand and supply trends and customer trends. In the event it fails to understand the market operations and risks in connection with such operations, it may have an adverse impact on its business, prospects, financial condition and results of operations.

Operate out of a single Manufacturing Facility: The company is operating out of its Manufacturing Facility which is situated in Rajkot, Gujarat. Given the geographic concentration of its manufacturing operations in one state i.e. Gujarat, its operations are susceptible to disruptions which may be caused by certain local and regional factors, including but not limited to political, economic and weather conditions, natural disasters, demographic factors, and other unforeseen events and circumstances. Apart from COVID-19 related operational restrictions, that were imposed on its facility, it has not experienced any material disruption at any of its existing manufacturing facility in the past. If any such disruptions occur, its operations may be affected leading to significant delays in the manufacturing and sale of its products which could materially and adversely affect its business, financial condition and results of operations.

Dependent on a limited number of suppliers for raw materials: The company relies on a limited number of suppliers for its raw materials who are highly concentrated in the western region of India. Dependence on few suppliers for raw materials may require it to procure them from other suppliers at higher cost and cause operational interruptions and affect its delivery capacity leading to loss of production and under-utilization of capacity. It also does not have long-term supply agreements with its raw material suppliers which may adversely affect its business, results of operations, and financial condition. 

Outlook

Anlon Healthcare is a chemical manufacturing company engaged in manufacturing of Pharma Intermediates and active pharmaceutical ingredients (APIs). The company manufactures high-purity pharmaceutical intermediates (for API production) and active pharmaceutical ingredients (used in formulations for medicines, nutraceuticals, personal care, and animal health products). The company has in-house testing, quality control and quality assurance for quality control. On the concern side, the company’s revenue from operations is dependent upon a limited number of customers and the loss of any of these customers or loss of revenue from any of these customers could have a material adverse effect on its business, financial condition, results of operations and cash flows. Moreover, the company is exposed to credit risk from its customers and the recoverability of its trade receivables is subject to uncertainties.

The issue has been offering 1,33,00,000 shares in a price band of Rs 86-91 per equity share. The aggregate size of the offer is around Rs 114.38 crore to Rs 121.03 crore based on lower and upper price band respectively. Minimum application is to be made for 164 shares and in multiples thereon, thereafter. On performance front, the company’s revenue from operations surged 80.65% to Rs 12,028.66 lakh in Fiscal 2025 from Rs 6,658.37 lakh in Fiscal 2024. Moreover, the company’s profit for the year soared by 112.46% to Rs 2,051.79 lakh in Fiscal 2024 from Rs 965.71 lakh in Fiscal 2024.

The company has consistently sought to diversify its portfolio of products which could cater to customers across segments, sectors, and geographies. It has enabled it to expand its product offerings from 10 commercial products in Fiscal 2018 to 65 commercial products during Fiscal 2025. In accordance with this, while it seeks to continue to strengthen its existing product portfolio, it intends to further diversify into products with prospects for increased growth and profitability. It plans to continue to increase offerings in its current business segments as well as diversify into new products by tapping into segments which in the view of its management have attractive growth prospects.