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Quest Laboratories Limited IPO Review: Quest Laboratories Limited has issued 44,49,600 shares totaling INR 43.16 crores. The corporation intends to invest in expansion, fund working capital requirements, and achieve overall corporate objectives.
Quest Laboratories Limited IPO – Important Dates
| Quest Laboratories IPO Date | May 15, 2024 to May 17, 2024 |
| Quest Laboratories IPO Listing Date | May 23, 2024 |
| Quest Laboratories IPO Price | INR 93-97 per share |
| Quest Laboratories IPO Lot Size | 1200 shares |
| Quest Laboratories IPO Total Issue Size | INR 43.16 crores |
| Quest Laboratories IPO Basis of Allotment | May 21, 2024 |
| Quest Laboratories IPO Initiation of Refunds | May 22, 2024 |
| Quest Laboratories IPO Credit of Shares to Demat | May 22, 2024 |
| Quest Laboratories IPO Issue Type | Book Built Issue IPO |
| Quest Laboratories IPO Listing At | NSE, SME |
Quest Laboratories Limited IPO – Company Profile
Quest Laboratories Limited manufactures a variety of pharmaceutical formulations, including antibiotics, antimalarials, and antispasmodics. Their varied product line serves to a variety of medical needs and preferences, including tablets, liquids, powders, and ointments.
They have a GLP certificate from the FDA, Bhopal, demonstrating a dedication to quality in pharmaceutical lab operations. They use advanced instruments such as HPLC, GC, and FTIR to assure precise analyses.
Their manufacturing processes rely on active pharmaceutical ingredients (APIs), key starting materials, and intermediaries. They also source excipients, lab chemicals, and packaging materials, building supplier connections across regions to ensure continuity and quality. The managing director of the company is Mr. Anil Kumar Sabarwal.
Quest Laboratories Limited IPO Financials
Quest Laboratories Technologies’ financial analysis shows a mixed result. Revenue increased year on year, surpassing the previous year’s. Profitability doubled, but equity and liabilities increased steadily, indicating potential expansion and reduced debt reliance.
- Revenue Trend: The revenue rose from ₹5,948.39 lakhs in March 2022 to ₹6,164.06 lakhs in March 2023. The income for the current year’s 9-month period ending December 2023 is INR 6,207.98 lakhs.
- Equity and Liabilities: Both equities and liabilities have consistently increased over time, indicating future growth and expansion. However, the debt-equity ratio has fallen, indicating a lower reliance on debt financing.
- Profitability: The profit after tax (PAT) has increased from ₹410.50 lakhs in March 2022 to ₹774.93 lakhs in December 2023. This increase in profitability could boost investor confidence.
- Earnings per Share (EPS): The diluted EPS increased from ₹3.81 in March 2022 to ₹7.18 in December 2023, indicating increasing earnings per share for investors.
- Return on Net Worth (RoNW): The RoNW has increased from 41.08% to 34.03%, showing that the company is better able to earn returns on shareholder equity.
- Financial Position: Total assets have increased, indicating future business growth. However, the current ratio has risen, indicating stronger liquidity and probable difficulties in satisfying short-term obligations.
Quest Laboratories Limited IPO Fundamental Analysis
| Particular | As of 31 March 2022 | As of 31 March 2023 | As of 31 December 2023 |
| Revenue (₹ in lakhs) | 5,948.39 | 6,164.06 | 6,207.98 |
| Equity (₹ in lakhs) | 999.38 | 1,502.21 | 2,277.15 |
| Expenses (₹ in lakhs) | 5,377.52 | 5,490.64 | 5,103.46 |
| Profit and Loss After Tax (₹ in lakhs) | 410.50 | 502.85 | 774.93 |
| Diluted EPS only (₹) | 3.81 | 4.66 | 7.18 |
| Return on Net Worth (%) | 41.08 | 33.47 | 34.03 |
| NAV per Equity Share (₹) | 9.26 | 13.93 | 21.11 |
| Total Assets (in lakhs) | 3,479.86 | 4,664.72 | 5,869.09 |
| Total Liabilities (in lakhs) | 2,480.48 | 3,162.51 | 3,246.94 |
| Debt-Equity Ratio | 0.31 | 0.27 | 0.20 |
| Current Ratio | 1.17 | 1.25 | 1.42 |
Quest Laboratories Limited IPO Peer Comparison
Quest Laboratories Limited demonstrates consistency, with a favorable P/E ratio and a strong return on equity. Beta Drugs Limited has a high market capitalization and outstanding profitability. Alpa Laboratories Limited exhibits consistent growth and strong returns. Zenith Drugs Limited has a moderate performance.
| Company | CMP (₹) | Face Value (₹) | P/E (₹) | EPS (Basic & Diluted) (₹) | RoNW (%) | NAV per Equity Share (Basic) (₹) |
| Quest Laboratories Limited | – | 10 | – | 4.66 | 33.47 | 13.93 |
| Beta Drugs Limited | 1,300 | 10 | 66.43 | 19.57 | 19.55 | 100.12 |
| Alpa Laboratories Limited | 93.95 | 10 | 15.92 | 19.57 | 8.59 | 68.69 |
| Zenith Drugs Limited | 63 | 10 | 14.69 | 4.29 | 29.88 | 14.37 |
Quest Laboratories Limited IPO Objective
Quest Laboratories Limited’s primary goal is to finance capital expenditures for expanding manufacturing facilities as well as working capital requirements, ensuring the company’s growth and operational stability.
- Funding of capital expenditures towards the purchase of plant and machinery for expansion at the existing manufacturing facility: The business expects to use INR 26 crores from the Net Proceeds to increase manufacturing capacity, notably in the injectable area, with a focus on cancer formulations and product diversification.
- Funding working capital requirements: The company intends to use INR 10 crores of the Net Proceeds to meet its working capital requirements for Fiscal Year 2025, demonstrating its reliance on internal accruals and bank financing.
- General Corporate Purpose: The corporation will allocate finances to general corporate goals such as strategic initiatives, collaborations, and addressing contingencies. Additionally, monies may be used for building repair, brand promotion, debt repayment, or other objectives as needed.
Quest Laboratories Limited IPO Risks And Challenges
Quest Laboratories Limited’s risk includes potential harm from the promoter’s conviction and ongoing appeal, regulatory scrutiny that affects operations, and reliance on industry clients, which threatens revenue and profitability.
- The promoter’s conviction and current appeal for manufacturing NSQ medications may divert management’s attention and impair the company’s brand and finances, potentially resulting in a maximum fine of Rs. 20,000 and one year in prison.
- Pharmaceutical manufacturers face severe regulatory scrutiny around the world, requiring facility registration and adherence to standards, with alterations required approval and non-standard quality incidents resulting in litigation affecting operations and adjusting to regulatory changes.
- Their pharmaceutical business is dependent on industry customers; any loss could reduce sales. Changes such as outsourcing product development or competition advancements may make their products obsolete, affecting sales and profitability.
Quest Laboratories Limited IPO – Industry & Market Potential
India’s manufacturing exports reached a record of US$ 447.46 billion in FY23, up 6.03% from FY22. By 2030, India’s middle-class consumption will be ranked second worldwide, indicating considerable economic potential.
The biopharma business is expected to fare well in the near term. Global pharmaceutical spending is predicted to reach $2.3 trillion by 2028, driven by increased demand despite decreased expectations for COVID-19 treatments.
India’s pharmaceutical business, which accounts for a substantial amount of international trade, is expected to increase by 9-12% over the next five years, propelling it into the top ten of global medication spending. Government measures, such as the National Health Protection Scheme, seek to strengthen the industry.
Quest Laboratories Limited IPO Allotment Structure
Quest Laboratories will allocate 50% to Qualified Institutional Buyers (QIB), 35% to Non-Institutional Investors (NII), and 15% to Retail Individual Investors (RII), according to SEBI requirements. Market makers are allocated 2,28,000 shares.
● Qualified Institutional Buyers (QIB): According to SEBI norms, 50% of the shares offered in the IPO would be reserved for Qualified Institutional Buyers. These include banks, mutual funds, and insurance businesses.
● Non-Institutional Investors (NII): 35% of the shares will be reserved for non-institutional investors. These often include corporate entities or individuals who invest more than Rs.2 lakhs.
● Retail Individual Investors (RII): The remaining 15% of the shares will be allocated to retail individual investors. These individual investors apply for shares worth less than Rs. 2 lakhs.
● Market Maker Reservation: A part of the shares, specifically 2,28,000 shares, are allocated for marker makers.
Quest Laboratories Limited IPO GMP
| IPO OPEN TO CLOSE DATE | IPO PRICE | LATEST GMP | ESTIMATED LISTING GAIN |
| 15 May to 17 May 2024 | 97 | — | 97 (0.00%) |
View Live GMP of All IPOs – Live GMP
Note: The information associated with the IPO is for educational purposes only. Consider with your financial advisor before investing in an IPO.
