Anthem Biosciences – Fast Growing High Margin CRDMO Player

15 Jul 2025 , 11:34 AM

Anthem Biosciences is a leading player in the fast growing CRDMO (Contract Research, Development and Manufacturing Organisation) industry. It is launching its IPO. The IPO consists entirely of an Offer For Sale and there is no Fresh Issue of shares.

Details of the IPO:

Fresh Issue & Offer for Sale

The offer is not an issuance of new shares. The entire issue is an Offer for Sale (OFS) of up to 59,561,404 shares by existing shareholders, which comprise promoters and other selling shareholders. The total amount of IPO aggregates to upto INR 33,950 million

Price Band: Rs. 540 to Rs. 570 per Equity Share

BRLMs:

The Book Running Lead Managers (BRLMs) to the issue are:

• JM Financial Limited
• Citi
• JPMorgan India Private Limited
• Nomura Financial Advisory and Securities (India) Private Limited

Contract Research and Manufacturing Services (CRMS) Industry Overview

The Contract Research and Manufacturing Services (CRAMS) industry offers services to pharmaceutical and biotechnology companies across various stages of the drug development and manufacturing processes. The business has several services that comprise research and development, clinical trials, manufacturing, and regulatory affairs.

End Customers and Products/Services Offered

The end users of the CRAMS industry are the pharmaceutical and biotechnology companies that often outsource research and development (R&D) and manufacturing to CROs and CDMOs. The industry’s products and services include:

• Research and development services, including discovery, preclinical, and clinical trials

• Contract manufacturing services, such as active pharmaceutical ingredients (APIs), finished dosage forms, and biologics
• Regulatory affairs services, including submission and approval of regulatory documents
• Clinical trials management services, including patient recruitment, data management, and trial oversight

Key Segments within the Industry

The CRAMS industry may be broadly categorized into two types:

• Contract Research Organizations (CROs): CROs offer R&D services, including preclinical and clinical trials, to pharma and biotech companies.
• Contract Development and Manufacturing Organizations (CDMOs): CDMOs offer manufacturing of APIs, finished dosage forms, and biologics to pharmaceutical and biotechnology companies.

Growth Dynamics in the Industry

The CRAMS market is estimated to witness robust growth in the near future due to growing outsourcing from pharmaceutical and biotechnology companies, rise in demand for biologics and biosimilars, and stringent regulations. Nevertheless, the industry is not devoid of headwinds like stiff competition, pricing pressure, and regulatory risks.

Opportunities:

• Increasing reliance on biologics and biosimilars
• Rising inclination of pharmaceutical and biotechnology companies to contract out.
• Upward driving factors: Competitive regulatory requirements increasing the requirement of Regulatory Affairs Service and consultancy.

Challenges:

• The following are the current challenges in this sector:
  Fierce competition among CROs and CDMOs
• Pricing pressures that pressure margins lower
• Regulation, including changes in regulation and other factors or activities that could cause regulatory action

Industry Size & Growth

The pharmaceutical contract services market is a growing global market, fueled primarily by the growing trend to outsource research and development (R&D) and manufacturing activities. It is projected to be USD 213.1 billion in 2024 and is expected to reach USD 330.0 billion by 2029, growing at a CAGR of 9.1% during the forecast period.

Key Driving Factors

• Rising trend of R&D and manufacturing outsourcing
• Increasing demand for unique skill and technology capabilities
• Increasing R&D and production costs
• The drugs are becoming more complex
• Sharp rise in demand for biologics (large molecules) and precision medicine

CRO Market

The global CRO market size is projected to reach USD 139.4 billion by 2029 from USD 94.1 billion in 2019, at a CAGR of 8.2%.

The CRO market can also be classified into discovery, preclinical & clinical services.

The discovery services segment is expected to dominate the CRO market in 2024, followed by preclinical and clinical services.

Key Driving Factors:

• Growing demand for outsourcing in discovery and preclinical services
• Increasing demand for expertise in specific areas such as biomarkers and translational research
• Negotiation of higher costs for R&D and the growing complexity of pharmaceutical products

CDMO Market:

The global CDMO market size is projected to reach USD 190.0 billion by 2029 from USD 128.8 billion in 2024, at a CAGR of 8.1% from 2024 to 2029.

The CDMO market can be additionally classified into small molecule and biologics (large molecule) services.

Small molecule services represented the largest services market of CDMO in 2024. Large molecule (biotherapeutics) services followed second.

Key Driving Factors:

• Increasing preference for the outsourcing of manufacturing process
• A Greater demand for domain-specific expertise and technology for biologics and precision medicine
• Increasing R&D costs and complexity of pharmaceuticals

Company Overview

About Anthem Biosciences Limited Anthem Biosciences is India’s premier and one of the world’s largest CRO companies offering integrated drug discovery and development solutions across the pharma value chain. Established in 2006 by Mr. Ajay Bhardwaj, with a vast experience in life sciences business, the Company is committed to offering its customers best in class products and services that address unmet needs in the pharmaceutical and biotechnology companies.

Anthem Biosciences has spread their wings from small startup to a major CRDMO in India to a global CRDMO company. The company’s services and capabilities have evolved to meet the increasing needs of the pharmaceutical and biotech sectors. Anthem Biosciences is now a leading service and innovation based company providing, molecular biology and in vitro services for drug discovery, design and synthesis of complex chemicals and intermediates, with the focus on innovation, quality and customer service.

Segments and Products/Services

The two principal segments in which Anthem Biosciences operates are:

• CRDMO Services: The company offers a full range of CRDMO services, from discovery, development and manufacturing of small molecules and biologics. Its services consist of process che
  mistry, analytical services, formulation development, and clinical supplies.
• Specialty Ingredients: Anthem Biosciences produces and sells novel fermentation produced complex specialty APIs such as: Probiotics Enzymes, Peptides, Nutritional Actives, Vitamin analo
  gues and Biosimilars

Key Milestones

• 2007 :Mr. Ajay Bhardwaj founded Anthem Biosciences.
• 2014: The company debuted biotransformation as a manufacturing skill.
• 2019: Anthem Biosciences expanded into flow chemistry.
• 2021: True North, an Indian private equity group, acquired a minority stake in the company.
• Through 2024: Anthem Biosciences had among the fastest revenue growth in peer group.

Manufacturing Facilities

The company operates three facilities in India, at Bommassandra (Unit I), Harohalli (Unit II) and under construction at Harohalli (Unit III) which is expected to be commissioned in the first half of Fiscal 2026. The sites are cGMP compliant and have received accreditation from a number of international regulatory bodies.

Competitive Landscape

The industry is highly competitive. Contract Research and Development Manufacturing (CRDMO) market has many competitors fighting for market share. Some of the largest players include

• Syngene International: A leading Indian CRDMO company that is globally competitive.
• Sai Life Sciences: A CRDMO from India, with an innovative and customer-centric approach.
• Divi’s Laboratories: An Indian pharma player with a large CRDMO business.
• Wuxi AppTec Co. Ltd: A global Chinese CRDMO company with a broad range of services.
• Asymchem Laboratories (Tianjin) Co. Ltd: A Chinese CRDMO company that specializes in innovative methodologies.

Market Positioning:

The company has developed into a key player in the India CRDMO market and has penetrated the global market. Strong emphasis on innovation, customer-focus and quality has allowed it to position itself differently against its competitors. End-to-end services from discovery to commercialization have also given the company a competitive advantage.

Key Strengths:

• Strong R&D.
• Wide range of services from discovery to development to commercialisation
• Focus on innovation and customer-focus
• Strong quality management system

 

Key Weaknesses:

• Relying on a small number of large customers
• Strong competition in the CRDMO industry
• Limited presence in certain geographies

Anthem vs Competition:

The company’s revenue growth rate and profit margin are in line with industry competitors. Nonetheless, its reliance on a handful of large customers and limited presence in some regions remain headwinds.

 

Revenue CAGR: The rate of revenue CAGR (including repeat) of the company is similar to that of Syngene International & Sai Life Sciences, but lower than that of Divi’s Laboratories.

Market Share: The company has market share lower than Syngene International and Divi’s Laboratories but similar to Sai Life Sciences.

Financial Profile

Arguably, Anthem has high RoNW and high EBITDA margin compared to its listed peer group in India. It has witnessed robust revenue growth over the past two years and stable margins. However, due to higher tax rate, its PAT growth has been muted. At the top end of price band, P/E valuations are at 70x.

Strong Revenue Growth:

Over the past 2 years, the company has witnessed a robust revenue growth of more than 30%. Operating revenue increased from INR 10,569.2 million in FY23 to INR 18,445.5 in FY25.

This growth is driven by the increase in revenue from D&M services, which rose by 45.45% to ₹13,055.14 million in Fiscal 2025 from ₹8,975.97 million in Fiscal 2024.

Robust EBITDA Margins

Given the nature of its business, adjusted EBITDA margins are high at 37% in FY25. While this is a modest increase from FY24’s EBITDA margins of 35.6%, it is still below FY23’s EBITDA margins of 40.6%. FY23’s EBITDA margins seem to be low due to much lower cost of materials consumed.

Lower profit growth due to increasing taxes

Despite a 30%+ YoY growth in EBITDA during FY25, the company’s PAT increased by only 24%. Sharp increase in total tax expense (from 23% in FY24 to 31% in FY25) has been the key reason behind the lower profit growth.

Figure: Financial summary

INR Millions	Y/E 03/23	Y/E 03/24	Y/E 03/25
Revenue from Operations	10569.24	14193.7	18445.53
YoY		34.29%	29.96%
Other income	770.68	636.99	857.32
Total Revenue	11339.93	14830.69	19302.85
Cost of materials consumed	3482.89	6407.86	8306.17
Changes in Work in Progress and finished goods inventories	-90.12	-412.35	-867.05
Employee benefits expense	1532.37	1829.27	2604.94
Other expenses	1355.25	1319.13	1693.11
EBITDA	4288.85	5049.79	6708.36
EBITDA Margin*	40.58%	35.58%	36.37%
YoY		17.74%	32.84%
Finance costs	67.63	95.35	103.29
Depreciation and amortization expense	636.96	818.24	893.71
Total expenses	6984.97	10057.51	12734.17
Profit/(Loss) before exceptional items and tax	4354.95	4773.18	6568.68
YoY		9.60%	37.62%
Exceptional items	618.02	0	0
Profit/(Loss) before tax	4972.98	4773.18	6568.68
Current tax	1200.48	1264.11	1820.27
Deferred tax	-79.36	-164.03	235.81
Total Tax Expense	1121.13	1100	2056.08
Total Comprehensive Income for the period	3859.41	3670.62	4508.63
Basic EPS	6.75	6.48	8.07
Diluted EPS	6.75	6.48	8.04
YoY		-4.00%	24.07%

Source: RHP, * – adjusted

 

Figure: Peer Comparison Table

INR Millions	Revenue	P/E Ratio (x)	EV/Operating EBITDA	Operating EBITDA	EBITDA Margin	Diluted EPS	RoNW (%)
Anthem Biosciences Limited	18445.53	70.90*		6837.8	37.07%	8.04	20.82
Syngene International Limited	36424	51.54	23.93	10418	28.60%	12.34	11.05
Sai Life Sciences Limited	16945.7	92.18	39.95	4056.61	23.94%	8.61	10.96
Cohance Lifesciences Limited (Formerly Suven Pharmaceuticals)	11975.8	97.29	68.44	3752	31.33%	10.45	13.61
Divi’s Laboratories Limited	93600	83.22	60.07	29680	31.71%	82.53	15.35

Source: RHP; * – At top end of price band