Amanta Healthcare IPO Opens: Should Investors Consider Subscribing?

The initial public offering (IPO) of Amanta Healthcare has officially opened for subscription, creating significant buzz among investors. With its strong presence in the pharmaceutical sector and ambitious growth plans, the company is seeking to raise fresh capital for expansion. But is this IPO worth considering for retail and institutional investors alike? Let’s break it down in detail.

The Basics: Key Details of the IPO

• Issue Size: ₹126 crore
• Type of Issue: Entirely fresh equity (no offer for sale)
• Price Band: ₹120–₹126 per share
• Total Shares Offered: 1 crore equity shares
• Subscription Window: September 1 to September 3, 2025
• Allotment Date: Expected on September 4, 2025
• Listing Date: Tentatively September 8, 2025, on both NSE and BSE

This means all proceeds from the issue will directly go into the company, strengthening its future expansion plans rather than rewarding existing shareholders.

Grey Market Signals: Strong Early Sentiment

Ahead of the subscription opening, the grey market premium (GMP) for Amanta Healthcare IPO has been reported at around ₹22–₹26. This premium suggests that investors are expecting a listing price of roughly ₹148–₹152 per share, translating to an estimated 20% upside over the upper end of the price band.

While grey market signals are not always perfect indicators, they do reflect investor sentiment and early enthusiasm around the IPO.

Where the Funds Will Go

The company has laid out a clear strategy for deploying the IPO proceeds:

1. New Manufacturing Line: About ₹70 crore will be used to establish a SteriPort line, enhancing its capacity in sterile liquid solutions.
2. Expansion in Small Volume Parenterals (SVP): Over ₹30 crore is earmarked to develop a new SVP production line.
3. General Corporate Purposes: The remaining funds will cover operational needs, working capital, and strengthening the balance sheet.

This allocation shows the company’s intent to scale up production and capture a larger share of the pharmaceutical market.

Strengths of Amanta Healthcare

1. Diverse Product Portfolio
   The company specializes in intravenous (IV) fluids, ophthalmic solutions, and respiratory care products. Its focus on sterile manufacturing gives it a niche in high-quality, safety-critical medical products.
2. Anchor Investor Confidence
   Prior to opening subscriptions, Amanta Healthcare raised nearly ₹38 crore from institutional investors at the upper price band, signaling trust in the company’s fundamentals.
3. Growing Market Potential
   With rising demand for sterile and injectable products in India and globally, the company is positioned well to benefit from industry tailwinds.

Risks and Concerns

1. High Valuation
   At a price-to-earnings (P/E) multiple of around 47x based on FY25 estimates, the IPO is considered richly valued. This may concern investors looking for cheaper entry points.
2. Debt and Finance Costs
   A significant portion of earnings has been absorbed by interest payments in recent years, with finance costs eating into margins. This could restrict profitability if not addressed.
3. Execution Challenges
   While new manufacturing lines promise growth, execution risks remain. Any delay or cost overrun could affect returns in the near term.

Investor Response So Far

The IPO has seen quick traction on Day 1. Within the first few hours, subscriptions reached over a quarter of the issue size, largely driven by retail investor interest. Qualified institutional buyers (QIBs) and non-institutional investors are expected to pick up pace as the subscription window progresses.

Should You Apply?

The Amanta Healthcare IPO offers a compelling story for investors who believe in the long-term growth of the Indian pharmaceutical industry. Its focus on sterile solutions, expansion of production facilities, and institutional investor backing make it a credible contender in the market.

However, the high valuation and debt burden suggest that this IPO may not suit extremely conservative investors or those looking for quick, risk-free gains. For individuals with a medium to long-term horizon, the IPO could present a rewarding opportunity, especially if the company executes its expansion plans effectively.

Final Verdict

• For long-term investors: The IPO is worth considering as a growth-oriented play in the healthcare space.
• For short-term traders: Listing gains are possible, given the positive grey market premium, but nothing is guaranteed.
• For risk-averse investors: It may be wiser to wait and watch how the company performs post-listing before taking a position.

In essence, Amanta Healthcare’s IPO is a high-potential but moderately risky bet, making it attractive for investors who can balance opportunity with caution.