Valiant Laboratories Limited IPO – Price, Lot size, Open date, GMP & Review

Valiant-Laboratories-Limited-IPO

Pharma company Valiant Laboratories Limited is an active pharmaceutical ingredient (API)/bulk drug manufacturer that is known for producing Paracetamol. This company is coming out with an IPO. India’s pharma sector is one of the dominant pillars of the economy. India is seen as the largest generic medicine manufacturer and provider and is also popularly known as the world’s pharmacy. With the Valiant Laboratories Limited IPO, investors have an attractive investment opportunity in the country’s pharma sector.

Valiant Laboratories Limited IPO will open for subscription from 27th September 2023 to 3rd October 2023.

Here are all the important details of Valiant Laboratories Limited IPO, including investment price band, allotment date, GMP, benefits, risks of investing in this IPO, and more.

IPO Details

The key details of Valiant Laboratories Limited IPO are as under.

IPO Size

The size of the IPO and different categories of the issue are:

Category	Details
IPO Opening Date	27th September 2023
IPO Closing Date	3rd September 2023
Listing	NSE, BSE
Issue Type	Book Built Issue IPO
Face Value of Shares	Rs. 10 per share
IPO Price Band	Rs. 133 – Rs. 140 per share
IPO Size	Rs. 152.46 crores
Offer for Sale
Fresh Issue	Rs. 152.46 crores

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IPO Dates

The important dates for Valiant Laboratories Limited IPO are highlighted below:

Event	Date
Opening date	27th September 2023
Closing Date	3rd October 2023
Allotment Date	5th October 2023
Refund Date	6th October 2023
Share Credit Date	6th October 2023
Listing Date	9th October 2023

IPO Lot Sizes

Investors can subscribe to Valiant Laboratories Limited IPO shares in pre-defined lots. The details of the lot sizes for this IPO are mentioned below:

Category	Details
Investments in lots	Minimum – 1 lotMaximum – 13 lots
Investment amount	Minimum – Rs. 13,965 – 14,700Maximum – Rs. 1,91,100
Shares	Minimum – 105Maximum – 1365

IPO Reservation

Here’s the summary of reservation for different applicant categories in this IPO:

Category of Investor	Reservation Percentage
Retail Individual Investor	35%
QIB (Qualified Institutional Buyer)	50%
NII (Non-Institutional Bidders)	15%

Valiant Laboratories Limited IPO Objectives

This IPO is in the nature of a Fresh Issue. The objectives of the IPO are mentioned below,

The proceeds will be used for Investment in their wholly-owned subsidiary, Valiant Advanced Sciences Private Limited (“VASPL”), to partially support the capital expenditures needed for establishing a manufacturing facility dedicated to specialty chemicals (specifically, ketene and diketene derivative products) in Saykha Industrial Area, Bharuch, Gujarat.
The company will further use the proceeds for investment in VASPL to meet its working capital needs.
The balance proceeds will be used for general corporate needs.

Top things to know about Valiant Laboratories Limited IPO

Valiant Laboratories is a leading manufacturer of Active Pharmaceutical Ingredients (APIs), with a primary focus on producing Paracetamol. As per the company’s Red Herring Prospectus, Valiant Laboratories holds Good Manufacturing Practices (GMP) certification for the production and sale of bulk drugs/APIs and ISO 9001:2015 certification. APIs are the essential raw materials used in the production of finished pharmaceutical products.

The Indian pharmaceutical API industry ranks third globally in terms of volume, following China and Italy. Approximately 35% of APIs and intermediaries produced in India are exported, while the rest are sold in the domestic market, including use by various formulation companies. India is a major supplier of generic drugs, contributing to around 20% of global generic drug supplies by volume.

Important aspects about Valiant Laboratories Ltd process and business set-up:

Their quality control team oversees the manufacturing process at all stages, from initial raw material testing to the final product before packaging.
In addition to its manufacturing facility in Tarapur Industrial Area, Palghar, Maharashtra, the company also has an in-house Research and Development (R&D) infrastructure. This R&D facility includes an analytical laboratory and infrastructure for product development activities.
The company believes that its focus on R&D, adherence to regulatory standards, quality systems, and continuous process improvement has established it as a reliable supplier to its customers.
Valiant Laboratories imports Para Amino Phenol, a raw material for Paracetamol production, from China and Cambodia. Through its wholly-owned subsidiary, Valiant Advanced Sciences Private Limited, the company plans to establish a greenfield project in Saykha Industrial Area, Bharuch, Gujarat, aimed at venturing into the speciality chemicals industry by manufacturing ketene and diketene derivative products on a land parcel of approximately 57,766 sq. mts (“Proposed Facility”).

Paracetamol, known scientifically as Acetaminophen or para-hydroxyacetanilide (C8H9NO2), is a widely used analgesic recommended as the first-line treatment for pain conditions by the World Health Organization (WHO). Initially approved by the U.S. Food and Drug Administration (US FDA) in 1951, Paracetamol is available in various forms, including syrup, regular tablets, effervescent tablets, injections, suppositories, and others.

The demand for Paracetamol APIs saw an increase in fiscal year 2022 due to pent-up demand resulting from the COVID-19 pandemic and extensive usage of common cold and fever medications during the second wave of the pandemic. Valiant Laboratories’ manufacturing facility is equipped with modern machinery and equipment to ensure efficient operations.

Is Valiant Laboratories Limited profitable – Know the financial performance of Valiant Laboratories Limited

Valiant Laboratories Limited’s financials are given in the table below:

Year	Assets (Rs. in cr)	Revenue (Rs. in cr)	Profit After Tax (Rs. in cr)	EPS (Diluted)	Net worth (Rs. in cr)	Total Borrowing (Rs. in cr)
Mar-2023	212.76	338.77	28.99	8.91	100.49	59.4
Mar-2022	181.81	293.47	27.49	9.52	71.46	60.68
Mar-2021	106.31	183.79	30.59	10.83	88.58	0.35

(Source: RHP)

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What are the strengths of Valiant Laboratories Limited?

Some of the key strengths of Valiant Laboratories Limited IPO that investors can take note of are

Category	Details
Business model	The company intends to implement backward integration measures to enhance operational efficiency by producing ketene and diketene derivative products.Valiant Laboratories exclusively produces Paracetamol, a versatile product used for treating a wide range of conditions, including headaches, muscle aches, arthritis, and more, and they anticipate using some of the products internally.They have diversified product applications across various industries, including pharmaceuticals, agrochemicals, and dyes and pigments, reducing reliance on any single sector.
Other merits	With a robust management team and experienced promoters, the company is less dependent on raw material imports, while concurrently pursuing global expansion, targeting its position as the preferred supplier of Paracetamol API in regulated markets.

What is the risk of investing in Valiant Laboratories Limited IPO?

Here are some of the risks that investors of Valiant Laboratories Limited IPO should know:

Category	Details
Business viability and profitability	Relying on the paracetamol API industry and facing product demand fluctuations could adversely impact revenue and profitability, while dependence on a limited number of suppliers concentrated in Western India for raw materials adds to the risk.The absence of registered trade names or trademarks might impede safeguarding intellectual property, and strict quality standards and customer audits pose the threat of order cancellations for non-compliance.
Other concerns	The intention to allocate a significant portion of Net Proceeds to the subsidiary Valiant Advanced Sciences Private Limited, which has not yet commenced commercial operations, is coupled with a past track record of related party transactions that could potentially create conflicts of interest with shareholders.

What is the Grey Market Premium (GMP) of Valiant Laboratories Limited?

As of September 25th, 2023, the grey market premium for the shares of Valiant Laboratories Limited IPO is Rs. 0 as per market observers. This means the shares are not expected to list at a premium over the listing cap price of Rs. 140.

Is Valiant Laboratories Limited IPO safe for investment?

The company is part of the pharma sector that is currently seeing huge demand in the domestic as well as international markets. Being the API and bulk drug manufacturer as well as exporter, the company is set to see further demand for its products and also has the backing of the financial performance. However, investors should focus on the core fundamentals of the company and compare it with industry standards before making an investment decision.