Anthem biosciences IPO , Basic and Insights

• Anthem bioscience IPO allotment is waited by investors eagerly. In this article we unfold the Anthem Bioscience potential to good invesment.
• Anthem Bioscience is contract research and innovation service provider. Meaning they provide services to Pharmaceutical companies for R&D , drugs tests for safety, efficacy (in vitro and in vivo), pre-clinical animal studies in a GLP facility, clone development, Antibody Drug Conjugates, R&D and manufacture of highly potent compounds, flow chemistry based production and large scale commercial product manufacture. [1]
• Company started in 2007 , and over the period of 17 years the company has expanded into more than 1000 researchers and two manufacturing plan in Banglore, India.
• Environmental clearance for Bommasandra and Harohalli is cleared as per the report submitted by Anthem Biosciences Private Limited.. The Bommasandra EC is valid until December 1, 2027. The Harohalli EC is valid until September 4, 2027.

• People who are purchasing its IPO must check its latest compliance as it need to be update in every six month.

Positive lookout of Anthem biosciences

• As per their annual report audited by K P. RAO & CO.

Metric	2025 (₹ in lakh)
Total Income	1,95,009
Net Profit	50,619
Cash Generated (Ops)	43,984
Cash in Hand (End)	11,095
Assets Owned	2,83,556
Liabilities (Debt etc.)	36,235
Owner’s Equity	2,47,321

Company is doing very well:

• Revenue and profits are up
• Debt is reduced
• Strong cash position
• Healthy investments in future growth
• Unbiased Auditor’s Opinion: The independent auditors provided an unbiased opinion on the standalone financial statements, affirming that they present a true and fair view of the company’s financial position, financial performance, and cash flows as of March 31, 2025, in conformity with Indian Accounting Standards and the Companies Act, 2013. This provides a high level of assurance regarding the reliability of the company’s financial reporting.
• Effective Internal Financial Controls: The company has an adequate system of internal financial controls over financial reporting, which were assessed by the auditors and found to be operating effectively in all material respects as of March 31, 2025. This indicates strong governance and reduced risk of material misstatements in financial reporting.
• Significant Revenue Growth: The company demonstrated robust top-line growth, with revenue from operations increasing substantially from ₹141,753.90 lakhs in the previous year to ₹184,064.91 lakhs for the year ended March 31, 2025. This indicates a strong market demand for its products and services.
• Strong Profitability Growth: Profitability saw a considerable increase, with profit for the year rising from ₹37,478.06 lakhs in the previous year to ₹50,618.75 lakhs for the year ended March 31, 2025. This upward trend in net profit is a key indicator of financial health and operational success.
• Improved Earnings Per Share (EPS): Both Basic and Diluted Earnings Per Share (EPS) increased from ₹6.61 in the previous year to ₹9.05 for the year ended March 31, 2025. This directly translates to increased value and returns for shareholders.
• Healthy Cash Flow Generation from Operations: The company’s net cash generated in operating activities significantly increased from ₹16,440.76 lakhs in the previous year to ₹43,983.57 lakhs for the year ended March 31, 2025. This strong operational cash flow indicates the company’s ability to fund its operations, investments, and reduce debt without external financing.
• Very Low Financial Leverage (Debt-Equity Ratio): The company maintains a very low Debt-Equity Ratio of 0.05 as of March 31, 2025 (down from 0.09 in 2024). This signifies minimal reliance on debt financing and a strong equity base, which contributes to lower financial risk and greater solvency.
• Strong Debt Service Coverage: The company has a very high Debt Service Coverage Ratio of 28.52 as of March 31, 2025 (up from 20.22 in 2024). This demonstrates the company’s robust ability to meet its debt obligations and indicates financial stability.
• Improving Returns on Equity (ROE) and Capital Employed (ROCE): The company showed improved efficiency in utilizing its capital, with its Return on Equity (ROE) increasing from 20.38% to 22.96% and Return on Capital Employed (ROCE) increasing from 25.47% to 29.08% from the previous year to March 31, 2025. These improvements indicate that the company is becoming more effective at generating profits from its assets and shareholder investments.
• Strategic Focus on High-Value Biotechnology and Advanced Infrastructure: Anthem Biosciences specializes in high-value products within drug, agrochemical, and specialty chemicals industries, and operates with state-of-the-art facilities, including a modern c-GMP kilo lab and a versatile GMP pilot plant. This strategic focus on specialized, high-growth segments, combined with advanced production capabilities, positions the company for future innovation and market competitiveness.

Things to lookout for Anthem biosciences

• No Dividend Declared or Paid: The company did not declare or pay any dividend during the year. While this could be a strategic decision to retain earnings for re-investment, it might also indicate a lack of sufficient distributable profits or a focus on internal funding over shareholder payouts, which could be a concern for investors seeking regular returns.

• Significant Loans and Advances to a Subsidiary: Anthem Biosciences Limited has provided substantial financial support to its wholly-owned subsidiary, Neoanthem Lifesciences Private Limited. The aggregate amount of advances given during the year was ₹23,444.38 lakhs, with a balance of ₹32,941.70 lakhs outstanding as of the balance sheet date. This represents a considerable financial exposure to a single related entity, carrying the risk of potential impairment if the subsidiary faces financial difficulties.

• Guarantees Stood for Another Company: The company also stood as a guarantor for Anthem Biopharma Private Limited for ₹750.00 lakhs during the year. This adds to the company’s contingent liabilities, meaning it could be obligated to pay this amount if Anthem Biopharma Private Limited defaults.

• Ongoing Disputed Statutory Dues: The company is involved in several ongoing disputes regarding statutory dues, which collectively amounted to ₹777.84 lakhs as contingent liabilities as of March 31, 2025. These include significant amounts related to Income Tax and Goods and Service Tax for various periods, posing a potential financial obligation if these disputes are resolved unfavorably against the company.

• Decrease in Total Assets: The company’s total assets significantly decreased from ₹232,422.61 lakhs as of March 31, 2024, to ₹203,556.37 lakhs as of March 31, 2025. A contraction in the asset base could limit the company’s operational capacity or future growth potential.

• Substantial Increase in Non-Current Borrowings: The company’s non-current borrowings increased substantially from ₹19.50 lakhs in 2024 to ₹4,500.00 lakhs in 2025. This significant rise in long-term debt implies increased financial leverage and higher future repayment obligations, which could put a strain on the company’s cash flows.

• Significantly Increased Finance Costs: Aligned with the increase in borrowings, the company’s finance costs have risen sharply from ₹62.88 lakhs in 2024 to ₹552.23 lakhs in 2025. This indicates a higher interest burden on the company, directly impacting its profitability.

• Capital Tied Up in Suspended Projects: As of March 31, 2025, the company has ₹2,080.99 lakhs in capital work-in-progress (CWIP) for “projects temporarily suspended”. This means a significant amount of capital is currently non-productive, tying up resources that are not yet generating returns and potentially leading to delays in project completion and revenue generation.

• Declining Key Financial Ratios: Several key financial ratios show a negative trend, indicating potential financial efficiency and liquidity concerns:

• The Current Ratio decreased from 4.78 in 2024 to 3.72 in 2025, suggesting a reduction in the company’s ability to cover its short-term liabilities with short-term assets.
• The Inventory Turnover Ratio decreased from 3.52 in 2024 to 2.70 in 2025, which could indicate slower sales or less efficient inventory management, leading to capital being tied up in stock for longer periods.
• The Net Profit Ratio slightly decreased from 25.77% in 2024 to 25.39% in 2025, implying a minor reduction in the company’s overall profitability margin from its revenue.

Investment Strategy: “Growth with Prudent Risk Management and ESG Awareness”

This strategy advocates for a long-term investment approach, capitalizing on the company’s robust financial performance while maintaining vigilance over its financial leverage and encouraging further clarity on environmental performance.

1. Environmental Compliance – An ESG-Aware Stance:

• Positive Indicators: The sources indicate that Anthem Biosciences Limited allocates resources towards “Environmental sustainability” as part of its Corporate Social Responsibility (CSR) activities.
• Furthermore, the company operates with “state-of-the-art facilities,” including a “modern c-GMP kilo lab” and a “versatile GMP pilot plant”.
• Modern facilities in the biotechnology and chemical sectors typically adhere to contemporary environmental standards and may involve advanced pollution control measures, suggesting a foundational commitment to compliant operations.
• Importantly, the auditor’s report does not highlight any material non-compliance specifically related to environmental regulations.
• Strategy Action: An investor keen on environmental compliance should consider this a positive baseline. The strategy would involve monitoring future annual reports and company disclosures for more specific environmental metrics, certifications, and detailed information on environmental management systems (EMS) or green initiatives.
• While the current data is high-level, the existing commitment through CSR and modern infrastructure suggests a positive trajectory.
• This company could be viewed as a candidate for a broader ESG (Environmental, Social, Governance) investment portfolio, with the understanding that more granular environmental data may be required for deeper analysis.

2. Interest Rates – Leveraging Financial Strength:

• Understanding the Risk: The company has experienced a “substantial increase in Non-Current Borrowings”, rising from ₹19.50 lakhs in 2024 to ₹4,500.00 lakhs in 2025.
• Correspondingly, its “finance costs have risen sharply” from ₹62.88 lakhs to ₹552.23 lakhs in the same period.
• This indicates increased financial leverage and a higher interest burden, making the company more sensitive to fluctuations in interest rates.
• Some of these borrowings, such as the CITI Bank Term Loan-Project, carry variable interest rates, noted as being between 8.85% and 9.05% per annum, depending on the basis of calculation.
• While Source in Annual Report includes a potentially contradictory statement that the company’s primarily short-term borrowings do not expose it to significant interest rate risk, the substantial increase in non-current (long-term) borrowings and finance costs suggests that interest rate movements are a relevant factor.
• Mitigating Factors/Appealing Aspects: Despite the increase in debt, the company’s financial structure remains robust.
• It maintains a “very low Debt-Equity Ratio of 0.05” as of March 31, 2025, indicating that it is minimally reliant on borrowed funds relative to its equity base.
• Furthermore, its “very high Debt Service Coverage Ratio of 28.52” demonstrates a strong capacity to meet its debt obligations comfortably, even with increased finance costs.
• The company also benefits from some loans, like the one from the Biotechnology Industry Research Assistance Council, being at a concessional rate of 2.00% per annum.
• The company’s policy of maintaining a “strong capital base” and sufficient liquidity is also highlighted as a means to manage future capital expenditure and business expansion.
• Strategy Action: Given the strong underlying financial ratios (low Debt-Equity and high Debt Service Coverage), the company appears well-equipped to manage its current increased debt load and associated finance costs.
• An investor should focus on the company’s ability to generate “strong profitability growth” (profit for the year increased to ₹50,618.75 lakhs) and “healthy cash flow generation from operations” (increased to ₹43,983.57 lakhs), which provide the means to service debt.
• The strategy here would be to monitor the company’s financial leverage and debt servicing ratios in subsequent reporting periods.
• As long as the Debt-Equity Ratio remains low and Debt Service Coverage high, the increased borrowings, while noting increased interest expense, do not appear to pose an immediate significant threat to the company’s solvency or operational stability from an interest rate perspective.

In essence, the strategy leverages the company’s strong operational performance and financial stability while acknowledging the upward trend in debt and finance costs, alongside a positive but general view of its environmental responsibility.

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