Windlas Biotech hits new low since listing; falls 16% against issue price

The stock was trading lower for the third straight day since listing

Shares of Windlas Biotech (WBL) extended their decline and were trading lower for the third straight day since listing. In the intra-day trade on Wednesday, the shares dropped 4 per cent at Rs 385.50 on the BSE, and are down 16 per cent from its issue price of Rs 460 per share. The stock of the pharmaceutical company had debuted on Monday, August 16, 2021. 

The company had raised Rs 402 crore through initial public offer (IPO) and proposed to utilize the funds to purchase equipment required for the capacity expansion of its existing facility at Dehradun Plant IV. The company will use net proceeds of the issue to finance incremental working capital requirements and to repay/prepay the company's borrowings.

WBL is a leading Contract Development Manufacturing Organisation (CDMO) with a focus on the chronic therapeutic category. With more than two decades of experience in manufacturing both, solid and liquid pharmaceutical dosage forms, WBL provides a comprehensive range of CDMO services including product discovery, product development, licensing and commercial manufacturing of generic products.

Analyst at Religare Broking believe the company is well placed to grab the opportunity arising from the industry given its strong product portfolio, relationship with its customers, R&D capabilities and efficient & quality compliant manufacturing facilities.

"On the financial front, the company’s performance has been steady. We have a positive view on the company from the long term perspective. The key risks are, the company operates in a highly competitive market and it requires a significant amount of working capital," the brokerage firm said.

That said, WBL's financial track record has been very weak, even though it is trying to revamp its business which is a long drawn process.

Thus one can find much better options among the listed players, opines Sneha Poddar, Research Analyst, Broking & Distribution at Motilal Oswal Financial Services.