At a Glance
Asston Pharmaceuticals Ltd is raising ₹27.56 Cr via a 100% fresh issue IPO on BSE SME. The company manufactures and exports pharma formulations like tablets, syrups, and capsules – mostly under third-party contracts. While FY25 saw a 218% PAT boost, it smells like IPO timing ka magic. At a post-issue P/E of 13.2x, is the pricing fair or sugar-coated?
1. 🎯 Introduction with Hook
Albendazole, Diclofenac, Ibuprofen… and IPO?
That’s the prescription from Asston Pharmaceuticals, a Navi Mumbai-based exporter of generic pharma products and OTC drugs.
The company has grown from ₹7 Cr to ₹25 Cr in revenue in two years, and is now looking to list on the SME board with an ₹123/share IPO. That’s right – a capsule company asking for a vitamin-sized valuation.
So is this Asston-ishing, or just another generics exporter trying to ride the SME listing wave?
2. 🧪 Business Model – WTF Do They Even Do?
Asston is in the formulation game, manufacturing and exporting:
- 💊 Tablets, capsules, sachets
- 🧃 Syrups, suspensions
- 🚚 Mostly exported (contract-manufactured), also sells to Indian marketers
They don’t own global brands. No blockbuster molecule. Just low-risk, low-margin, mass-manufactured formulations.
Most of their sales are B2B exports or P2P (principle-to-principle) model sales.
3. 💰 Financials Overview – Profit, Margins, ROE, Growth
Let’s look at how they performed before and after IPO dreams began…
| ₹ Cr | FY23 | FY24 | FY25 | FY25 (May 2 mo) |
|---|---|---|---|---|
| Revenue | 7.19 | 15.84 | 25.61 | 6.21 |
| EBITDA | 1.52 | 2.55 | 6.16 | 1.93 |
| PAT | 1.06 | 1.36 | 4.33 | 1.32 |
| Net Worth | 1.99 | 6.39 | 10.72 | 12.04 |
| Total Debt | 5.25 | 6.82 | 7.26 | 7.83 |
👀 Observations:
- PAT jumped 218% YoY in FY25
- EBITDA margin: 24.6%
- PAT margin: 17.3%
- ROE: 50.6% 💣
- ROCE: 51.2% 🔥
BUT… 📉
Margins suddenly ballooned in FY25.
Coincidentally – just before IPO filing. Cute.
4. 📊 Valuation – Is It Cheap, Meh, or Crack?
- Issue Price: ₹123
- Post-IPO EPS (annualized): ₹9.32
- P/E: 13.2x
- P/BV: 12.07x 😬
Comparable SME pharma companies usually trade around 10–15x, depending on branding and export markets.
This is fair-ish, though that P/BV feels rich.
🎯 EduInvesting FV Range:
₹90–₹115/share
(Fair at 10–12x P/E on sustainable earnings)
5. 🔥 What’s Cooking – News, Triggers, Drama
- 🏭 Using ₹6 Cr for new machinery purchase
- 💸 ₹13 Cr to fund working capital (raw material, maybe export inventory)
- 💳 ₹1 Cr to repay loans
- 🧑⚕️ Anchor book of ₹7.81 Cr raised from institutions
Also: sudden margin explosion = possibly price-fattened for IPO.
6. 💣 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 (Mar) |
|---|---|
| Total Assets | ₹28.12 Cr |
| Net Worth | ₹10.72 Cr |
| Debt | ₹7.26 Cr |
| D/E Ratio | 0.68x |
Post-IPO, debt will shrink, net worth will rise, and gearing will improve. No financial distress. Just a small balance sheet dreaming big.
7. 💵 Cash Flow – Sab Number Game Hai
Operating cash flow? Looks decent, given high PAT.
Working capital is a constant pressure point in this business – especially for exporters.
IPO infusion helps plug that hole. But free cash flow? Don’t count on it yet.
8. 📐 Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 50.6% |
| ROCE | 51.2% |
| PAT Margin | 17.3% |
| EBITDA Margin | 24.6% |
| D/E | 0.68x |
| P/E (post-issue) | 13.2x |
| Price/Book | 12.07x |
Great ratios, but remember: boosted earnings make great ratios. Let’s see if this holds in FY26.
9. 💵 P&L Breakdown – Show Me the Money
Revenue mix includes:
- Direct sales of own manufactured generic drugs
- Contract manufacturing for third parties
- Exports – largely P2P or low-bid models
Cost heads:
- API and raw materials
- Utilities, plant costs
- Regulatory + compliance (US FDA not yet involved)
- Salaries, logistics
Margin levers = scale + better working capital.
10. 🤼 Peer Comparison – Who Else in the Game?
| Company | Revenue | PAT | ROE | P/E |
|---|---|---|---|---|
| Asston | ₹25 Cr | ₹4.33 Cr | 50.6% | 13.2x |
| Zenith Drugs (SME) | ₹44 Cr | ₹5 Cr | 35% | 16x |
| Mankind Pharma | ₹9,300 Cr | ₹1,300 Cr | 24% | ~35x |
Asston is smaller, more export-driven, and still in early innings.
But compared to peers in the SME zone? Slightly better margins, similar pricing.
11. 🧩 Miscellaneous – Shareholding, Promoters
Promoters:
- Dr. Ashish Sakalkar
- Saili More
- Sachin Badakh
Pre-IPO holding: 68.76%
Post-IPO: 50.66%
No shady exits. Full fresh issue. Anchor lock-ins are in place.
12. 🧑⚖️ EduInvesting Verdict™
Asston’s IPO is like a painkiller: fast acting, but might wear off.
✅ Positives:
- Great FY25 growth
- Clean financials
- 100% fresh issue
- Reasonable pricing
- Good ROE/ROCE
❌ Risks:
- PAT jump smells like IPO window-dressing
- Very small scale
- Export-heavy biz can get hit by FX and policy shifts
- High Price/Book
This isn’t a scammy SME IPO. But it’s also not a defensible moat-based story yet.
Long story short?
Asston may be profitable. But is it predictable?
Tags: Asston Pharma IPO, SME pharma IPO, July 2025 IPOs, generic drug IPO, small cap pharma India, BSE SME IPO
✍️ Written by Prashant | 📅 July 7, 2025
