Anthem Biosciences is an innovation-driven and technology-focused Contract Research, Development and Manufacturing Organization (CRDMO) with fully integrated operations spanning across drug discovery, development and manufacturing.

Its products and services are offered under two business segments: (1) CRDMO services, which provides wide range of customizable support throughout the development of new chemical and biological drugs from early research to clinical trials and commercial manufacturing; and (2) manufacturing and selling of specialty ingredients, including complex fermentation-based APIs like probiotics, enzymes, peptides, nutritional actives, vitamin analogues, and biosimilars.

Caters to a diverse global customer base, including emerging biotech innovators and large pharmaceutical companies. As of March 31, 2025, it had over 550 customers across the CRDMO and specialty ingredients businesses in more than 44 countries.

Focused on developing long-term partnerships with small pharma and emerging biotech firms to drive growth.

CRDMO business caters to customers in regulated markets. While specialty ingredients business complements the CRDMO business, by targeting both regulated markets such as United States and Europe as well as semi-regulated markets such as India, South and Southeast Asia, Latin America and Middle East.

In FY25, CRDMO accounted for 81.65% of total revenue, with 10.87% coming from R&D and 70.78% from developmental and commercial manufacturing providing a stable revenue base. Specialty Ingredients contributed the remaining 18.35%.

Operates under a fee-for-service (FFS) model, which offers greater cost-effectiveness but results in more volatile revenue compared to the full-time equivalent (FTE) model.

Continuously making investments to enhance product offerings across different treatment types and technologies.

Focused on innovation, successfully developed different technologies like RNA interference (RNAi) that can turn off bad genes, Antibody-Drug Conjugates (ADCs) that deliver medicine directly to sick cells, and other building blocks like peptides, lipids, and oligonucleotides to make new medicines.

As of March 31, 2025, ongoing projects involve complex molecules across different types, including 7 ADCs, 2 RNAi, 10 lipids, 10 peptides, and 1 oligonucleotide. There are 242 active projects in total, including 68 in discovery, 145 in early phase, 16 in late phase, and 13 in commercial manufacturing.

In FY25, North America contributed 26.42% to revenue, Europe 54.61%, India 16.56%, and Rest of Asia 2.41%.

Operates three manufacturing facilities: Unit I in Bommassandra, Unit II in Harohalli, and Unit III in Harohalli, which is under construction and expected to be completed by early Fiscal 2026.

As of March 2025, custom synthesis capacity was 270 KL and fermentation capacity was 142 KL. Following expansion by early Fiscal 2026, custom synthesis capacity will increase to 425 KL and fermentation capacity to 182 KL.

The manufacturing process of specialty ingredients often involves green chemistry techniques, such as biotransformation, enabling it to deliver stable, quality and cost-effective products while maintaining margins.

Formed a strategic partnership with Davos Pharma, a sales partner in the United States. This partnership provides access to local industry knowledge and supports front-end presence, servicing functions, and customer relationships. As a result, an aggregate of 89 customers, including 83 emerging biotech firms have been on boarded in the United States over the last three fiscal years.

Agreements are made either as a tripartite arrangement with customers and Davos Pharma, or directly with the customer. As a result, Davos Pharma became the third largest customer by revenue in Fiscal 2025, contributing 14.28% of total revenue.

Going forward, plans to expand technological capabilities to include laboratory-scale photochemistry and electrosynthesis capabilities, which are greener alternatives for creating new compounds.

Intends to broaden its portfolio of specialty ingredients to target a wider range of companies by focusing on products, such as specialized fermentation-based APIs, probiotics and enzymes that have high barriers to entry, as they are difficult to manufacture. Moreover, it is open to exploring opportunities for inorganic expansion.

Offer and its objects

The IPO is a complete offer for sale of 5,95,61,404 equity shares at the upper price band, aggregating up to Rs 3,395 crore. Existing shareholders, namely Ganesh Sambasivam, K. Ravindra Chandrappa, Viridity Tone LLP, and others are making the offer.

Price band for the IPO is Rs 540 to Rs 570 per equity share of face value Rs 2 each.

Company will not directly receive any proceeds from the Offer, and all the Offer Proceeds will be received by the Selling Shareholders, in proportion to the Offered Shares sold by them.

The promoters are Ajay Bhardwaj, Ishaan Bhardwaj, Ganesh Sambasivam, and K Ravindra Chandrappa. The promoters and promoter group hold an aggregate of 43,17,47,949 equity shares, aggregating to 76.87% of the pre-offer issued and paid-up equity share capital. Their post IPO shareholding is expected to be around 74.69%.

The issue, through the book-building process, will open on 14 July 2025 and will close on 16 July 2025.

Strengths

Demonstrated strong revenue growth and robust operating margins, with revenue increasing from Rs 1,056.92 crore in FY23 to Rs 1,844.55 crore in FY25, and an EBITDA margin consistently above 35%.

Offers comprehensive one-stop service capabilities across the drug life cycle from drug discovery, development and manufacturing for both small molecules and biologics (large molecules).

Well-established in different types of treatments and technologies like RNA interference (RNAi), antibody-drug conjugates (ADC), peptides, lipids, and oligonucleotides.

Focused on developing long-term partnerships with small pharma and emerging biotech firms. This helps build early-stage relationships that grow through the drug development cycle. When their molecules succeed or larger pharma players acquire them, the relationships often continue, allowing greater involvement and expanded work scope. As of March 31, 2025, three out of 10 commercialized molecules manufactured have originated from small pharmaceutical or emerging biotech players.

Expanding manufacturing capacity to cater to rising demand. Moreover, existing facilities are cGMP compliant and accredited by global regulatory bodies including the FDA (US), ANVISA (Brazil), TGA (Australia), and PMDA (Japan).

Developing alternative sources of domestic suppliers in India to de-risk supply chain and reduce dependency on offshore suppliers, particularly from China.

Long-standing customer relationships. The Top 10 customers for Fiscal 2025 have an average length of relationship of 12 years.

India’s CRDMO industry is among the fastest growing globally, projected to grow at a 13.4% CAGR from 2024 to 2029, reaching USD 15.4 billion. Key growth drivers include a skilled English-speaking workforce, supportive government policies (IP protection, R&D incentives), cost advantages, and global supply chain shifts driven by the "China plus One" strategy and the US Biosecure Act. This growth is set to benefit leading players like Anthem Biosciences.

Extensive experience of promoters and senior management personnel.

Weaknesses

High customer concentration, with the top two customers contributing approximately 46.65% of total revenue in FY25, and the top five contributing 70.92%.

High dependence on molecule success, as clinical failures can significantly affect revenue. For instance, revenue from operations decreased in Fiscal 2023 compared to Fiscal 2022, partly attributable to the failure of a phase III molecule and withdrawal of a commercialized molecule.

Risk of losing significant manufacturing revenue from services supplied to innovator pharmaceutical companies. In FY25, 54.4% of total revenue came from innovator pharma companies, which may decline after their patents expire.

A significant portion of revenue comes from exports, with 83.44% in FY25, exposing the business to foreign currency fluctuations and geopolitical uncertainties.

Subject to stringent licensing and regulatory requirements imposed by regulatory authorities in India and internationally, including the USFDA, ANVISA, TGA and 43 PMDA, which are constantly evolving.

Increasing reliance on overseas suppliers, particularly a single-source supplier in China, poses risks related to supply chain disruptions and geopolitical tensions. Overseas procurement rose from 24.60% in FY24 to 48.41% in FY25.

There are outstanding legal proceedings (including criminal proceedings) involving Anthem Biosciences, its directors, promoters, and Key Managerial Personnel. An adverse outcome in any of these proceedings could negatively affect the business.

Reliance on Davos Pharma for U.S. market access may affect growth if that partnership falters.

Valuation

Net sales increased 30% to Rs 1,844.55 crore in FY2025 as compared with FY2024. The OPM improved 79 bps to 36.37%, leading to a 33% increase in OP to Rs 670.84 crore. OI increased 35% to Rs 85.73 crore. Interest cost rose 8% to Rs 10.33 crore. Depreciation cost went up 9% to Rs 89.37 crore. PBT surged 38% to Rs 656.87 crore. Tax expenses were Rs 205.61 crore as compared with Rs 110.01 crore. Net profit soared 23% to Rs 451.26 crore.

The TTM EPS on post-issue equity works out to Rs 8. At the upper price band of Rs 570, P/E is 71.

The global pharma industry is poised to grow supported by factors such as growth of the elderly population, rising incidence of chronic diseases, sedentary lifestyles, and increasing health awareness. Moreover, small pharmaceutical and biotech companies are expected to grow faster than the industry, with their share increasing from 23.7% in 2024 to 26.1% in 2029 due to a shift in the pharmaceutical industry towards novel therapies and innovation-driven growth. Anthem Biosciences is well positioned to benefit from this trend due to its focus on emerging biotech clients, strong capabilities, and a favorable China plus one dynamic. While there is potential for growth, it must carefully manage risks such as revenue volatility, supplier dependence, and regulatory challenges.

Listed peers such as Syngene International trades at TTM P/E of 53, Sai Life Sciences at TTM P/E of 96, Cohance Lifesciences at TTM P/E of 144 and Divi’s Laboratories at TTM P/E of 83 as on 11 July 2025. The OPM and ROE stood at 36.4% and 20.8%, respectively, in FY2025. These were 28.6% and 11% for Syngene International, 23.9% and 11% for Sai Life Sciences, 31.3% and 14.3% for Cohance Lifesciences, and 31.7% and 15.4% for Divi’s Laboratories, respectively.