Asston Pharma IPO Opens: Should You Subscribe?

The primary market continues to attract investors’ attention as a new SME IPO hits the market—Asston Pharmaceuticals IPO, opening for bidding on 9th July 2025. The bookbuilding issue, worth ₹27.56 crores, is entirely a fresh issue of 22.41 lakh equity shares. With a promising growth record, strong industry fundamentals, and increasing investor interest, Asston Pharmaceuticals Limited’s IPO has become a talking point among retail and HNI investors.

This article provides a complete breakdown of Asston Pharmaceuticals IPO, covering company background, financials, valuations, GMP trends, allotment process, expert opinion, and whether it’s worth your investment.

IPO Highlights: Key Information at a Glance

• IPO Open Date: 9th July 2025

• IPO Close Date: 11th July 2025

• Listing Date (Tentative): 16th July 2025

• Exchange: BSE-SME

• Issue Size: ₹27.56 crore (22,41,000 equity shares)

• Issue Type: Bookbuilding

• Price Band: ₹115 to ₹123

• Face Value: ₹10 per share

• Lot Size: 1,000 shares

• Minimum Investment (Retail): ₹2,46,000 (2 lots)

• IPO Registrar: Maashitla Securities Pvt. Ltd.

• Allotment Date: 14th July 2025

• Refund Initiation: 15th July 2025

Company Background: What Does Asston Pharmaceuticals Do?

Asston Pharmaceuticals Limited, incorporated in 2019, operates in the pharmaceutical manufacturing sector. The company focuses on formulations across tablets, capsules, syrups, sachets, and nutraceuticals. It operates on a principal-to-principal contract manufacturing model, collaborating with various marketers both in India and abroad.

Key Strengths

• Formulation Expertise: Diverse range of therapeutic segments.

• Strategic Location: Easy access to domestic and export markets.

• Scalable Infrastructure: Modern manufacturing units.

• Experienced Promoters: Led by Dr. Ashish Narayan Saklakar and team.

• Skilled Workforce: Professional team with GMP-compliant operations.

Asston Pharmaceuticals blends both direct marketing and third-party manufacturing to establish itself in a competitive and fragmented pharmaceutical space.

Use of IPO Proceeds

Asston Pharmaceuticals plans to utilize the ₹27.56 crore raised from the IPO in the following ways:

• Acquisition of machinery and capex for manufacturing unit

• Meeting incremental working capital requirements

• Repayment/prepayment of borrowings

• General corporate purposes

These objectives reflect the company’s intention to expand its capacity, reduce dependency on external debt, and enhance operating leverage.

Share Reservation Details

The allocation pattern ensures that the offering is balanced between institutions and retail, with a significant portion for QIBs, hinting at a structured bookbuild.

Financial Performance: Revenue and Profit Growth

The company’s revenue has grown by 61.67% YoY, and PAT has shown a 218% increase, reflecting significant operational efficiency and improved margins. This uptrend in earnings highlights a sharp post-pandemic recovery and market expansion.

Key Financial Ratios and Metrics

These indicators suggest that Asston Pharmaceuticals is efficient in generating profit from equity and capital employed. The ROE and ROCE both exceed 50%, which is considered excellent in the pharma space.

Peer Comparison

Asston stands out in terms of RoNW and margin efficiency. While its size is smaller, the financial ratios suggest better capital productivity than its peers.

Promoter Shareholding

• Pre-Issue Holding: 68.76%

• Post-Issue Holding: 50.66%

The post-IPO promoter holding of over 50% ensures significant promoter skin in the game, reducing the risk of dilution in the near term.

Grey Market Premium (GMP) Trends

The consistent GMP of ₹10 in the last three sessions signals rising interest in the IPO, with a potential listing gain of 8–10%. However, GMP is unofficial and can change quickly based on subscription and market sentiment.

Subscription Status (Live on 9th July 2025)

Subscription numbers are yet to be released but expected to be healthy based on GMP trends and positive market response.

Expert View

Dilip Davda, an industry veteran, summarized:

“The company has posted a sudden boost in its profitability in FY25, which raises sustainability concerns. It operates in a fragmented, competitive sector. Yet, the efficiency ratios and growth suggest early momentum. Informed investors may consider a moderate long-term allocation.”

Pros and Cons of Investing

Pros

• Strong financial growth

• Excellent RoNW and ROCE

• Reasonable PE ratio

• Healthy GMP and investor interest

• Strategic business model with formulation diversity

Cons

• Small size and SME platform listing

• Sharp earnings growth may not be sustainable

• Lower liquidity post listing compared to mainboard stocks

Future Outlook

Asston Pharmaceuticals is currently positioned in a growing sector with consistent demand. India’s pharmaceutical exports and contract manufacturing industry are expected to grow at 10–12% CAGR through 2030.

If the company maintains its margins and scales efficiently, its earnings can justify a premium valuation. The use of funds toward capex and debt reduction is a positive sign. However, execution remains the key.

Post listing, investor focus will shift to:

• FY26 half-yearly results

• Expansion pace and product pipeline

• Margin sustainability

• Debt reduction impact

If these parameters hold steady, the stock may deliver moderate to strong gains over 12–24 months.

Final Verdict: Should You Apply?

The Asston Pharmaceuticals IPO presents an interesting opportunity in the SME pharma space. It combines strong financial performance, manageable valuations, and growth intent with some sustainability concerns.

For retail and HNI investors with surplus liquidity and a medium-to-long-term horizon, this IPO could be considered. Conservative investors may wait for post-listing performance before entering.

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