Amanta Healthcare specializes in producing liquid medicines, including fluids and antibiotics used in hospitals. The company distributes its products in India and 21 other countries, operating a highly efficient factory in Gujarat. Recently, Amanta launched an IPO to raise funds for expanding its production lines to increase medicine output. The IPO attracted significant interest from retail investors, who purchased a substantial number of shares, along with considerable investment from wealthy individuals. However, institutional investors were more cautious, opting to acquire fewer shares. Initially, the grey market price for the shares was high but subsequently declined, indicating skepticism about future stock performance post-listing.
Amanta Healthcare has several advantages, including a broad international market for its medicines, a highly efficient factory that operates nearly continuously, and a favorable profit margin relative to investment. Nevertheless, there are notable risks. The reliance on a single factory poses a production risk if issues arise there. Additionally, the company carries a significant amount of debt, raising concerns about its ability to manage interest payments. A few customers account for a large portion of sales, meaning the loss of one could significantly impact revenue. Rising interest rates could also reduce profitability due to high financing costs.
In summary, while there is strong interest from small investors, larger investors remain wary due to the company’s debt and associated risks that may impact future earnings.