Virupaksha Organics IPO

About Virupaksha Organics IPO

The IPO of Virupaksha Organics comprises a fresh issue without any offer for sale. The fresh issue comprises equity shares aggregating up to ₹740 crores. It’s a 100% book-built issue. The lot size of shares in the IPO is [TBA] and the price band of shares is between [TBA].

Virupaksha Organics IPO opens on [XX] and closes on [YY]. The allotment of shares will take place on [TBA]. The credit of shares to the Demat account will take place on [TBA]. The initiation of refunds will take place on [TBA]. The listing of shares will take place on [TBA].

Virupaksha Organics is a research and development (“R&D”) driven Indian pharmaceutical company engaged in the manufacture of active pharmaceutical ingredients (“APIs”) and intermediates. It has offerings across small molecule APIs, key starting materials (“KSMs”) and intermediates. It also has a contract development and manufacturing (“CDMO”) business where it leverages its R&D and manufacturing capabilities to provide CDMO services for third-party manufacturers.

Objectives of Virupaksha Organics IPO

The company proposes to utilise the net proceeds for:

• Funding capital expenditure requirement for capacity expansion at Unit 1, Unit 2, Unit 4 and Unit 5 (collectively, “Expansion Units”) and such proposed expansion
• Prepayment of all or a portion of certain outstanding borrowings
• General corporate purposes

Industry Outlook

Between 2024 and 2029, the global pharmaceutical market is projected to grow at a CAGR of 6.3%, maintaining a comparable growth rate of 6.6% observed from 2019 to 2024, and reaching US$ 2.4 trillion by 2029, up from US$ 1.3 trillion in 2019. The growth in the pharma market also translates into corresponding growth in the API market. While the global API market is expected to grow at a CAGR of 5.3% between 2024-2029, the Indian API market is expected to grow at 7.5% in the same period.

On the other hand, India’s API market is expected to grow from US$ 4.1 billion in 2024 to US$ 6.0 billion by 2029, reflecting a CAGR of 7.6%, nearly 1.5x the global average. The surge in demand is fuelled by the increasing demand for generic medications, expanding domestic pharmaceutical consumption, and government initiatives like the PLI scheme promoting production.

Virupaksha Organics Company Information

Virupaksha Organics is a research and development (“R&D”) driven Indian pharmaceutical company engaged in the manufacture of active pharmaceutical ingredients (“APIs”) and intermediates. It has offerings across small molecule APIs, key starting materials (“KSMs”) and intermediates, which has allowed it to experience an operating revenue CAGR of 12.2% between fiscal 2023 and fiscal 2025, higher than most of its assessed peers.

Its operations are supported by advanced R&D capabilities, manufacturing units, and a commitment to stringent regulatory compliance, ensuring the delivery of quality pharmaceutical solutions worldwide. The company also has a contract development and manufacturing (“CDMO”) business where it leverages its R&D and manufacturing capabilities to provide CDMO services for third-party manufacturers.

Strengths of Virupaksha Organics

• Comprehensive product portfolio positioning it well to capitalise on industry tailwinds
• Diversified global customer base with long-standing relationships with key customers
• Robust manufacturing units, backed by strong research and development capabilities
• Experienced promoters and management team

Risks of Virupaksha Organics

• Reduction in demand for these products in the analgesics, anti-histamines and anti-fungal therapeutic areas could have an adverse effect on business
• Manufacturing or quality control problems may subject the company to regulatory action, damage reputation and have an adverse effect on business
• Loss of relationship with any of the customers or delays or reductions in their orders may have an adverse effect on business
• Slowdown or shutdown in manufacturing operations, including due to regulatory action, could have an adverse effect on business
• Operations involve activities and materials which are hazardous in nature and could result in a suspension of operations
• Labour intensive operations and the company may be subject to strikes, work stoppages and increased wage demand by employees
• Success depends on ability to develop and commercialise new products in a timely manner
• International operations expose the company to complex management, legal, tax and economic risks
• Non-compliance with and changes in environmental, health and safety, and labour laws and other applicable regulations may adversely affect business
• Inability to accurately forecast demand for products and manage inventory may have an adverse effect on business

Anchor Investor Bidding Date

TBA

IPO Registrar and Book Running Lead Managers

• IPO Registrar: KFin Technologies
• Book Running Lead Managers: Axis Capital and SBI Capital Markets

Virupaksha Organics Business Model

Virupaksha Organics has a diverse product portfolio of 54 products, comprising 23 APIs and 31 intermediates, as of March 31, 2025. APIs are the biologically active components in medications that produce the intended therapeutic effects. As of March 31, 2025, the company had a pipeline of 10 products under development in anti-inflammatory and anti-diabetic therapeutic areas in various stages of development.

Virupaksha Organics Growth Trajectory

The revenue from operations of Virupaksha Organics jumped from ₹644.839 crores in FY 23 to ₹811.709 crores in FY 25. Its EBITDA margin increased from 14.10% in FY 23 to 17.77% in FY 25. PAT margin increased from 6.68% in FY 23 to 9.70% in FY 25. Comprehensive product portfolio and robust manufacturing units have helped the company grow over the years.

Virupaksha Organics Market Position

Virupaksha Organics's diverse product portfolio has enabled it to serve over 550 customers spread across over 100 countries, as of March 31, 2025. Its export operations are central to its business strategy and it intends to continue to focus on international markets including the United States, Europe and Japan. As of March 31, 2025, it had 25 drug master files (“DMFs”) filed across various markets, including 11 DMFs filed with the United States Food and Drug Administration (“USFDA”).

How to Apply for the Virupaksha Organics IPO?

To apply for this IPO:

• Log in to your Kotak Neo Demat account: Log in to your Demat account to access IPO investments. Next, select the current IPO section.
• Specify IPO details: Enter the number of lots and the price you wish to apply for.
• Enter UPI ID: After entering your UPI ID, click submit. This will place your bid with the exchange.
• Mandate Notification: Your UPI app will receive a mandate notification to block funds.
• Approve Request: Your funds will be blocked once you approve the mandate request on your UPI.