Advanced Enzyme Tech IPO Opens: Here’s What Management Said

Advanced Enzyme Technologies, which launched its initial public offer (IPO) to raise around Rs 410 crore today, will utilise part of the proceeds to expand its business going ahead.

“We will be expanding geographically…… we are going to expand our research base more and continue to expand our product portfolio,” Chandrakant Laxminarayan Rathi, promoter and managing director at Advanced Enzyme Technologies, told NDTV Profit. (Watch)

Thane-based Advanced Enzyme Technologies, the second biggest enzyme company in India, is engaged in the research and development, manufacturing and marketing of more than 400 proprietary products developed from 60 indigenous enzymes. It is amongst the top 15 global enzyme companies, with a global market share of 0.9 per cent.

The company exports to 50 different countries. International business contributes 64 per cent of its revenues.

Mr Rathi said the company’s focus will be more on expanding its research base to develop more enzymes, which will enable them to capture higher market shares. Post the IPO, the management believes that it will be able to attract better talent from the market, which will aid its research base further.

Advanced Enzyme Technologies primarily operates in two business verticals – healthcare and nutrition. These two segments contributed 88 per cent to its revenue last fiscal while the remaining came from bio-processing.

The company supplies its products to leading pharma companies like Sanofi India, Cipla. Its top 10 customers contributed less than 40 per cent of its total revenues.

The company also sees big opportunity in animal nutrition globally.

In FY16, Advanced Enzyme had posted a net profit of Rs 79 crore on revenues of Rs 294 crore. Its net profit has witnessed a compound annual growth rate (CAGR) of 23.9 per cent over last four years on the back of improved margins. Its EBITDA or operating margin has improved to 47.1 per cent in FY16 from 40.6 per cent in FY13.

Advanced Enzyme Technologies shares are available in a price band of Rs 880 to Rs 896. The IPO closes for subscription on July 22.