Mumbai-based Fabtech Technologies Limited files DRHP for IPO

Mumbai-based Fabtech Technologies, a turnkey engineering solutions provider for the pharmaceuticals, biotech and healthcare industry has filed its draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO).

The IPO with a face value of Rs 10 per equity share is entirely a fresh issue of up to 1.20 crore equity shares. The offer also includes a reservation for a subscription by eligible employees and a discount is being offered to eligible employees bidding in the employee reservation portion.

 

The company, in consultation with the book-running lead managers, may consider a further issue of equity shares through a private placement, preferential offer, or any other method aggregating up to Rs 10 crores and shall not exceed 20% of the size of the fresh issue. If such placement is completed, the fresh issue size will be reduced.

 

The Issue is being made through the book-building process, wherein not more than 50% of the net issue shall be available for allocation on a proportionate basis to qualified institutional buyers, not less than 15% of the offer shall be available for allocation to non-institutional bidders, and not less than 35% of the offer shall be available for allocation to retail individual bidders.

 

The proceeds from the fresh issue to the extent of Rs 120 crore will be used for funding the working capital requirements of the company; Rs 30 crore for pursuing inorganic growth initiatives through acquisitions; and general corporate purposes.

Established in 2018, Fabtech Technologies, part of the Fabtech Group was incorporated as Globeroute Ventures Private Ltd. The company demerged from the group company in 2021 to achieve operational efficiencies.

Pursuant to the Demerger, the order book of Fabtech Technologies International Private Ltd, which comprised twenty-seven projects with an aggregate value of Rs 287.16 cr were transferred to Fabtech Technologies Ltd

Fabtech Technologies is led  Aasif Ahsan Khan, Hemant Mohan Anavkar, and Aarif Ahsan Khan who collectively have over 3 decades of experience in pharmaceutical engineering. It offers comprehensive start to finish solutions encompassing designing, engineering, procurement, installation and testing of select pharmaceutical equipment for a wide range of customers.

Its turnkey engineering solutions involves an extensive range of services such as comprehensive market analysis, disease profiling, designing and detailed engineering of equipment tailored to the manufacturing process and the applicable quality standards, leveraging the best technologies to enhance the efficiency, reliability, and sustainability of the projects and execution and commissioning strategy. It has the capability to execute green field and brown field projects

Since incorporation and till June 30, 2024, the company has completed thirty-five projects across countries, namely Saudi Arabia, Egypt, Algeria, Bangladesh, Ethiopia, Sri Lanka, United Arab Emirates.

Its business model is considered to be asset light in nature because it procures majority of the equipment required by our customers through our Related Entities, on an arms-length basis. It is not required to make capital investment for setting up a manufacturing unit or heavy machinery for manufacturing the equipment supplied by them.

The companies order book has grown from Rs 321.41 cr as of March 31, 2022, to Rs 42,4.64 cr as of March 31, 2023 and Rs 613.06 cr as of March 31, 2024. As of June 30, 2024, FTL had an order book aggregating Rs 726.15 crore.

Fabtech Technologies’ consolidated revenue from operations increased by 16.69% from Rs 193.80 crore in Fiscal 2023 to Rs 226.13 crore in Fiscal 2024, primarily due to a rise in Sales of Products, Sales of Services, and Export Incentives. Consolidated Profit after tax increased by 25.23% from ₹21.73 crore in Fiscal 2023 to ₹27.21 crore in Fiscal 2024.

As per the CRISIL report in its DRHP, the capex in global pharmaceutical industry is estimated to increase moving forward owing to factors such as rising demand for innovative treatments, advancements in technology, expiring patents and increasing regulatory focus. Additionally, the need for modernization due to increasing integration of artificial learning (AI) tools and expansion of manufacturing facilities by pharmaceutical companies to increase their geographical presence will also contribute to higher capex investments by pharmaceutical companies.

Unistone Capital Private Limited is the sole book-running lead manager to the issue and Bigshare Services Private Limited is the registrar to the offer.