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  • Writer's pictureJatin Agarwal

Valiant Laboratories IPO

Updated: Sep 28, 2023


valiant lab logo

Company and IPO Overview:


Valiant Laboratories Limited is the subsidiary of Valiant Organics Limited. Company is a prominent player in the pharmaceutical ingredient manufacturing industry, has carved its niche with a strong focus on the production of Paracetamol. Incorporated in 1980, the company boasts a legacy of over four decades, marked by resilience, innovation, and a commitment to quality.


Valiant Laboratories manufacturing facility is located at Palghar, in the state of Maharashtra, India which is spread over an aggregate parcel of land admeasuring about 2,000 sq. mts. with an aggregate annual total installed capacity of 9,000 MT per annum.


In addition to its manufacturing capabilities, Valiant Laboratories has invested in an advanced Research and Development (R&D) facility, equipped with a cutting-edge analytical laboratory. This facility serves as a hub for research and innovation, facilitating the development of new products and the enhancement of existing ones.


Valiant Laboratories IPO is the next main board IPO which is ready to go public, the company is about to raise around ₹ 152.46 crores via IPO comprising Fresh Issue only. The price band of the issue is ₹ 133 to ₹ 140 with a minimum market lot of 105 shares. Valiant Laboratories IPO subscription quota for retail is 35.00%, NII is 15.00% and QIB is 50.00%.


Financials (rounded off):

Date

Total Revenue (₹ in cr)

​​​PAT (₹ in cr)

​31/03/2021

184

31

31/03/2022

293

27

31/03/2023

339

29


Objectives of the Issue:

1. Investment in its wholly-owned subsidiary, Valiant Advanced Sciences Private Limited (VASPL) for part-financing its capital expenditure requirements in relation to the setting up of a manufacturing facility for specialty chemicals at Saykha Industrial Area, Bharuch, Bharuch, Gujarat (Proposed Facility).

2. Investment in VASPL for funding its working capital requirements.


IPO Details:

IPO Date

27/09/2023-03/10/2023

Face Value

₹10 per share

IPO Price Band

₹133-₹140 per share

IPO Lot Size

105 Shares

Listing at

NSE, BSE

Basis of Allotment

05/10/2023

Credit of Shares in Demat

06/10/2023

Listing Date

09/10/2023

Pre-Issue Shareholding

100%

Post-Issue Shareholding

74.94%

Retail Minimum Lot Size

105 shares (₹14,700)


Valuations & Margins:

Indicators

FY 21

FY 22

FY 23

EPS

10.83

9.52

8.91

P/E

-

-

15.71

EBITDA (%)

27.42

14.52

10.51

ROCE (%)

70.86

35.75

22.76


Important things to note about the Company:


Top reasons to consider the IPO:


1. Valiant Laboratories maintains a strong financial position with an emphasis on having a strong balance sheet and increased profitability. For FY23, its revenue from operations was Rs 339 million, which grew at a CAGR of 23.9% from FY17 to FY23. For FY23, its profit was Rs 290 million, which grew at a CAGR of 26.8% from FY17 to FY23.


2. Valiant Laboratories imports Para Amino Phenol, which is the raw material for the manufacture of Paracetamol. Its percentage of imports to total purchases has fallen to 11.9% in FY23 from 74.9% in FY21.


3. Valiant Laboratories has an in-house research and development facility equipped with an analytical laboratory. This infrastructure supports the company’s efforts in developing new products and improving existing ones.


4. Shantilal Shivji Vora, Promoter and Non-Executive Director of Valiant Laboratories, has rich experience of over 45 years in the chemical and pharmaceutical industry.


Risk Factors to watch out in the IPO:


1. Valiant Laboratories is a single-product manufacturer, and any changes to the paracetamol API industry or the product demand will adversely affect the revenues, financials, and profitability.


2. Valiant Laboratories is dependent on a few customers for a major part of its revenues. Further, it does not enter into long-term arrangements with these customers, and any failure to continue the arrangements could adversely affect the business.


3. The pharmaceutical industry is intensely competitive, and the company's inability to compete effectively may adversely affect the business.


4. The pharmaceutical industry is subject to strict quality requirements and regular inspections. Non-compliance with quality standards may result in the cancellation of orders and damage to the company’s reputation.


Crisp Insights:

  • Valiant Laboratories IPO GMP Today: The Company is commanding a GMP of Rs.15.

  • Valiant Laboratories GMP is weak and hence, investors need to be careful.

  • Valiant Laboratories IPO Review: Valiant Laboratories IPO Price has decent valuation in the P/E of 15x to 16x while industry average P/E is 40x. Well-informed investors with a decent knowledge in the pharma sector may park funds for medium to long-term rewards.


Disclaimer: All information is provided for educational and informational purpose only. Data is fetched from publicly available sources such as the DRHP filed by the company. The website or the author takes no guarantee for the accuracy of the data however, we have tried our best to present accurate data to out readers. Please consult a financial advisor or do your own analysis before investing/trading in the stock market.

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