Astonea Labs listed on BSE SME at ₹137.45 price at 1.81% premium to issue price

The contract manufacturing specialist for pharmaceutical and cosmetic products, Astonea Labs Limited, has made a modest debut on the BSE SME platform. After closing its IPO bidding between May 27-29, 2025, the company made its stock market debut on June 3, 2025, at 1.81% premium to the issue price. This book-building IPO raised ₹37.67 crore, marking a significant step for India's contract manufacturing sector as the company aims to expand its production capabilities, enhance export operations, and strengthen its brand portfolio including "Glow Up" and "Regero".

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Astonea Labs IPO Listing Details

Astonea Labs Limited launched its IPO through book-building process at ₹135 per share. The minimum investment required was 1,000 shares costing ₹1,35,000. The IPO received moderate response with an overall subscription of 1.79 times - NII segment at 5.60 times, retail at 1.69 times, and QIB at 0.70 times by the final day of bidding.

Listing Price:  The Astonea Labs IPO share price opened at ₹137.45 on BSE SME on June 3, 2025, marking a modest premium of 1.81% to the issue price of ₹135, reflecting cautious investor sentiment.

Investor Sentiment: Astonea Labs holds a specialised position in contract manufacturing of pharmaceutical and cosmetic products for both domestic and international markets with growing export focus.

First-Day Trading Performance Outlook

Astonea Labs commenced trading on BSE SME on June 3, 2025, witnessing a modest stock market debut. The company opened at ₹137.45, representing a 1.81% premium to its IPO price of ₹135. The Astonea Labs Share Price entered the market with a diversified portfolio including contract manufacturing services and own brands like "Glow Up" skincare and "Regero" pharmaceutical products, along with export operations to countries like Iraq and Yemen. During the market debut, investors and analysts closely monitored the stock's performance considering the pharmaceutical contract manufacturing sector's growth potential and the company's expansion plans.

Market Sentiment and Analysis

Astonea Labs Limited, incorporated in 2017, operates as a contract manufacturer of pharmaceutical and cosmetic products serving companies within India and internationally. The company manufactures antibiotics, anti-cold medicines, antihistamines, diabetes treatments, heart medications, and various cosmetic products including skin, tooth, and hair care items in forms like gels, creams, and serums. Additionally, the company trades packaging and raw materials while developing its own brand portfolio.

Market Sentiment: Investors actively evaluate the company's contract manufacturing capabilities, brand development potential, and growth prospects in India's expanding pharmaceutical and cosmetic manufacturing sector.

Performance Indicators: Astonea Labs demonstrated consistent growth with strong profitability metrics including ROE of 37.86% and ROCE of 22.95%, though with high debt-to-equity ratio of 2.16.

Listing Outlook: The modest listing with 1.81% premium reflects measured investor confidence in the company's business model while acknowledging the challenges in the competitive contract manufacturing space.

Growth Drivers and Challenges

Astonea Labs presents growth potential with its contract manufacturing expertise, brand development initiatives, and export expansion plans. The rising demand for pharmaceutical and cosmetic contract manufacturing services, growing export opportunities, and increasing focus on own brand development support its business prospects. However, the company faces challenges including intense competition, high debt levels, working capital requirements, and the need for continuous investment in manufacturing capabilities and regulatory compliance.

Growth Drivers:

• Contract Manufacturing Expertise: Specialised capabilities in pharmaceutical and cosmetic product manufacturing for domestic and international clients
• Brand Portfolio Development: Own brands "Glow Up" and "Regero" with plans to launch "Avicel" providing higher margin opportunities
• Export Focus: Growing international presence with exports to Iraq, Yemen and registration plans in Bolivia, South America
• Experienced Management: Skilled leadership team with dedicated workforce of 217 employees and scalable business model
• Diverse Product Range: Wide portfolio covering pharmaceuticals, cosmetics, and related packaging materials
   

Challenges:

• High Debt Burden: Significant debt-to-equity ratio of 2.16 requiring careful financial management and cash flow monitoring
• Intense Competition: Operating in competitive contract manufacturing space with pressure on margins
• Working Capital Needs: Continuous funding requirements for raw materials, inventory management, and business operations
• Regulatory Compliance: Need for ongoing compliance with pharmaceutical and cosmetic industry standards across multiple markets

Utilisation of IPO Proceeds

Astonea Labs plans to utilise the ₹37.67 crore raised from the fresh issue to strengthen its manufacturing capabilities and support strategic expansion.

• Manufacturing Expansion: ₹5.23 crore allocated for purchase and installation of plant and machinery for ointment production to meet international standards for export markets.
• Brand Building: ₹4.95 crore earmarked for advertising, marketing, and brand building activities to strengthen market presence.
• Working Capital: ₹19.75 crore designated for funding working capital requirements to support business operations and growth.
• International Expansion: ₹1.29 crore allocated for registration expenses in Bolivia, South America to expand international market reach.
   

Financial Performance of Astonea Labs 

Astonea Labs has shown steady financial growth with improving profitability metrics:

• Revenue: ₹69.69 crore for December 2024, showing resilience compared to ₹80.29 crore in FY2024, reflecting market dynamics in the contract manufacturing sector.
• Net Profit: ₹4.10 crore in December 2024, maintaining growth momentum from ₹3.81 crore in FY2024, demonstrating consistent profitability improvement.
• Net Worth: ₹17.28 crore as of December 2024, showing substantial growth from ₹11.97 crore in FY2024, reflecting business expansion and retained earnings.
   

Astonea Labs offers a specialised investment opportunity in the pharmaceutical and cosmetic contract manufacturing sector with its growing brand portfolio and export focus. While it faces challenges like high debt levels and competitive pressures, its contract manufacturing expertise and brand development initiatives position it well for capitalising on India's expanding pharmaceutical and cosmetic manufacturing demand.

The IPO presents an opportunity for informed investors to participate in a company with strong fundamentals and growth potential in the contract manufacturing space, as evidenced by the modest but positive listing performance on BSE SME platform.