Anlon Healthcare IPO Day 2: Retail Frenzy 22x, Flat GMP – Should You Stay Cautious?

Anlon Healthcare’s ₹121 crore IPO is shaping up into a retail-driven frenzy, as Day 2 subscriptions reveal strong investor appetite. The issue, open from August 26 to August 29, is priced in the ₹86-₹91 band with a minimum lot of 164 shares. By the end of Day 2, the overall IPO was oversubscribed 3.3 times, largely powered by retail investors at 22.3x, while institutional demand also began catching up with QIBs at 1.01x and NIIs at 2.09x.

Despite such aggressive retail response, the grey market premium (GMP) has stayed flat at ₹5 since before opening, suggesting only modest listing gains. This contrast points to high investor enthusiasm but cautious market expectations. On fundamentals, the company offers reasonable valuations, margin expansion, and strong growth potential, but concerns like its small scale, revenue dip in FY24, and dependence on a few customers remain key risks. For investors, the IPO is clearly a mix of strong demand and cautious listing signals.

IPO Overview

• IPO Date: August 26 to August 29, 2025
• Total Issue Size: ₹121.03 crore
• Price Band: ₹86 to ₹91 per share
• Lot Size: 164 Shares
• Tentative Allotment Date: September 1, 2025
• Listing Date: September 3, 2025 (Tentative)
• Subscription Status: 3.3x as of day 2.
• GMP: The GMP for Anlon Healthcare IPO is ₹5 (5.49% premium), according to Chittorgarh.com (as of August 28).
  Disclaimer: GMP is an unofficial indicator and is subject to market volatility.

Highlight of Day 2 of the IPO

On Day 2, Anlon Healthcare IPO witnessed strong acceleration in retail demand, driving overall subscription to 3.3 times. Retail investors subscribed 22.3x of their quota, while NIIs stood at 2.09x and QIBs finally crossed full subscription at 1.01x. However, the GMP stayed unchanged at ₹5, signaling that while the IPO enjoys strong bidding traction, the market is still pricing in only limited listing upside.

Highlight of Day 1 of the IPO

On Day 1, Anlon Healthcare IPO got subscribed 1.69 times, driven majorly by retail investors applying at 8.99 times their quota, while institutions stayed cautious (QIBs at 0.91x, NIIs at 0.71x). The GMP remained unchanged at ₹5, indicating only mild listing premium signals. Current subscription data shows strong retail appetite but limited institutional confidence—suggesting the real verdict may emerge closer to Day 3.

How does Anlon Healthcare Make Money?

Anlon Healthcare is a chemical manufacturer for the pharma sector. Think of it as the unseen backbone of drugs you and I consume daily. It doesn’t sell finished medicines in stores, instead, it makes the key ingredients (called APIs and intermediates) that pharmaceutical companies use to create tablets, syrups, capsules, nutraceuticals, skincare products, and even animal health solutions.

On top of that, Anlon does custom chemical manufacturing for specific client requirements and helps pharma firms with regulatory filings to sell internationally. As of March 31, 2025, it had a pipeline of 65 commercial products, 28 at pilot stage, and 49 under lab scale.

Objectives of the IPO

The company plans to use the ₹121 crore raised through IPO towards:

• ₹30.72 crore: Expanding its manufacturing plant capacity (adding 700 MTPA to current 400 MTPA).
• ₹5 crore: Repaying a portion of its secured loans (reducing debt).
• ₹43.15 crore: Boosting working capital for daily operations like raw material purchase and other running costs.
• Remaining funds: General corporate purposes.

Strengths:

• Profits jumped from ₹5.8 crore in FY23 to ₹20.5 crore in FY25 (almost 4x in two years).
• Debt-to-equity dropped from 9x to 0.73x in two years, making the company relatively debt-light.
• 65 products live, and nearly 80 more in the pipeline, signaling a strong innovation runway.
• Top pharma clients conduct regular audits (33 in FY25), and no orders were cancelled, showing strong customer trust.
• Drug Master File (DMF) approvals in markets like Brazil, China, and Japan, opening global export doors.

Risks:

• Sales dropped sharply in FY24 (₹113 crore to ₹67 crore), indicating business lumpy and exposed to disruptions.
• 10 customers bring 77.7% of revenues. Losing one would hurt badly.
• The entire production is from Rajkot facility, any disruption (disaster, compliance issues) can stall operations.
• Needs heavy cash flow support. The working capital cycle is stretched at 308 days, meaning money stays locked in operations too long.
• Near 90% purchases from top 10 suppliers, pricing flexibility low and supply chain vulnerable.

For detailed information, visit Anlon Healthcare’s IPO page.

Peer Comparison

As per the RHP, Anlon Healthcare’s listed industry peers are Kronox Lab Sciences, AMI Organics, and Supriya Lifesciences.

Anlon is smaller in scale, but operationally efficient with decent margins. The valuation at P/E 14.3x looks attractive compared to peers trading 2x,4x higher multiples.

Source: RHP

IPO Valuation

At the upper price band of ₹91, Anlon’s P/E sits at 14.3x FY25 earnings. Compared to peers like AMI Organics (61.6x) and Supriya Lifesciences (31.1x), this looks undervalued and affordable. However, investors must factor in the small size, concentrated risks, and single-plant dependence before jumping in.

Disclaimer: The P/E ratio here is calculated using the company’s post-IPO equity and its most recent FY25 net profits at the upper end of the price band.

Who Is Behind Anlon Healthcare?

The driving force of Anlon Healthcare is Punitkumar R. Rasadia, the Chairman & MD. With over 11 years in pharma chemicals, he sets strategy, supply chain, and expansion planning. Rasadia’s strength lies in sourcing and scaling niche APIs, he’s led Anlon’s sharp turnaround in profitability.

Alongside him is Meet Atulkumar Vachhani, Executive Director, also with 11+ years of industry experience. His focus has been on operations, finance, and marketing, essentially managing the “growth engine” of the company.

The third promoter, Mamata P. Rasadia, has a technical background in chemistry and pharmacy, adding scientific depth to leadership.

Supporting them is a bench of professionals, CFO Hitesh Bavanjibhai Makwana, industry veterans like Deepak Kumar Chima (30+ years in drug production), and domain experts in quality, compliance, and product development. Collectively, they’ve built a 65-product company with a credible pipeline and operational expertise. Importantly, promoters hold over 70% stake pre-issue, aligning their skin in the game with investors.

Industry Outlook

India’s pharma bulk drugs and API industry is growing steadily, expected to reach ₹7,32,700 crore by FY30, growing at 10% CAGR. Drivers include rising global demand for generics, government’s PLI scheme incentivizing domestic API production, and higher local healthcare consumption due to aging population and insurance penetration.

However, challenges remain: dependency on China for raw materials, pricing pressure from intense competition, and strict regulatory hurdles. For companies like Anlon, niche positioning in select APIs and regulatory approvals abroad open interesting growth avenues despite industry headwinds.

Analyst View

Anlon Healthcare’s IPO continues to draw heavy traction from retail investors, with Day 2 subscription standing at an impressive 22.3x in the retail quota. Non-institutional buyers (2.09x) and QIBs (1.01x) have also started showing more interest, taking the overall issue to 3.3x. This indicates retail frenzy is still the main driver, while institutional participation has now picked up pace, a healthy sign compared to Day 1.

On the flip side, the grey market premium (GMP) remains flat at ₹5 since pre-opening, signaling only modest listing expectations despite strong retail demand. Fundamentally, the company is backed by improving margins, capex-driven growth, low leverage, and reasonable valuations compared to sector peers. But risks of revenue dip in FY24, small scale of operations, and customer concentration should not be ignored.

In short: Retail demand is extraordinary, institutional trust is slowly building, and valuations look fair, but the stagnant GMP keeps listing projections cautious. Investors with a higher risk appetite may see this as a long-term pharma bet, while conservative players may want to stay watchful till listing.

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Disclaimer

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