Anthem Biosciences IPO analysis

Anthem Biosciences IPO (initial public offering) will open for subscription on July 14, 2025, and close on July 16, 2025. Below is a breakdown of the CRDMO's strengths, weaknesses and growth prospects to help investors make an informed decision.

Anthem Biosciences IPO in a nutshell

• Quality: Between FY23 and FY25, Anthem reported a three-year average ROE and ROCE of 21 and 22 per cent, respectively.
• Growth: Between FY23 and FY25, its revenue and net profit grew 32 and 8 per cent per annum, respectively.
• Valuation: At the upper price band of Rs 570, the stock is expected to be valued at a P/E and P/B ratio of around 71 times and 13 times, respectively. In comparison, its listed peers trade at a median P/E and average P/B ratio of 90 times and 12 times, respectively.
• Overview: The company is set to benefit from growing geopolitical tensions and rising labour costs in China, which are encouraging global pharmaceutical companies to diversify their supply chains. The proposed ‘US Biosecure Act’, which seeks to restrict US companies from using certain Chinese biotechnology services, is also likely to redirect demand towards countries like India. However, the competitive nature of the industry remains a risk for the company.

About Anthem Biosciences

Anthem Biosciences offers a wide range of customisable CRDMO (contract research, development and manufacturing organisation) services that support drug development from the early research stage to commercial manufacturing. They also make specialty ingredients (18 per cent revenue contribution) like enzymes, probiotics and biosimilars. The company gets nearly 84 per cent of its revenue from exports, primarily to North America and Europe.

Strengths of Anthem Biosciences

• Integrated services: Anthem is India’s fastest-growing CRDMO, offering end-to-end solutions across drug discovery, development and manufacturing for both small molecules and biologics. Its integrated services cover NCEs (novel chemical compounds) and NBEs (innovative biologic drugs), helping clients shorten timelines and cut costs.

Weaknesses of Anthem Biosciences

• Revenue concentration: The company received nearly 71 per cent of its FY25 revenue from just the top five customers. Any inability to retain key customers or decrease in revenues from any of them could negatively affect the business.
• High competition: The CRDMO market is highly fragmented, with around 1,000 to 1,500 CROs and CDMOs competing globally as of March 2025. It includes a wide mix of players, including full-service CRDMOs, small and large standalone CROs and CDMOs, as well as in-house teams within pharma companies and academic institutions.

Risk report

Company and business

• Will the company be able to scale up its business?

Yes. The global CRDMO market is projected to grow 9.1 per cent annually till 2029, while the Indian CRDMO industry is expected to outpace this at 13.4 per cent, indicating strong tailwinds that should allow the company to scale up.

• Does the company have recognisable brands with client stickiness?

Yes. The company has an average relationship of 12 years with its top 10 customers.

• Does the company have a credible moat?

No. Anthem faces significant competition from other CRDMO manufacturers like Syngene International, Sai Life Sciences and Divi’s Laboratories in India.

Financials

• Was the company's operating cash flow positive during the last three years?

Yes. It reported positive cash flow from operations in each of the last three years.

• Is the company free from reliance on huge working capital for day-to-day affairs?

No. Anthem Biosciences has a high working capital cycle of over four months due to its high trade receivables of nearly 90 days.

• Can the company run its business without relying on external funding in the next three years?

Yes. The company is profitable with free cash flow from operations. It can run the business without relying on external financing for the next three years.

Assessing an IPO requires a careful evaluation of a company's strengths, weaknesses, and growth potential, just like we've outlined for Anthem Biosciences. But wealth creation can only be achieved through a well-researched, balanced stock portfolio.

Our Value Research Stock Advisor can help with that. What do you get? Meticulously researched stock recommendations and ready-to-invest portfolios, updated every month.

Join thousands of serious investors using our research to build long-term wealth, one smart stock at a time.

Subscribe now!

Disclaimer: This story is not a stock recommendation. Investors should do their due diligence before investing.

Also read: Smartworks Coworking Spaces IPO analysis