Roorkee-based pharmaceutical contract development and manufacturing organization (CDMO) Cotec Healthcare has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an INR 295 crore IPO.
Cotec Healthcare IPO comprises a fresh issue of INR 295 crore and an OFS of 60 lakh shares by the promoters Harsh Tiwari and Vandana Tiwari, who will each offload 30 lakh shares. The IPO is being managed by Pantomath Capital Advisors, while KFin Technologies is acting as the registrar to the issue.
Cotec Healthcare IPO: Business Snapshot
Founded in Uttarakhand, Cotec Healthcare has emerged as India’s second-largest CDMO player by number of dosage forms, with capabilities across 24 distinct formulation types, according to a Frost & Sullivan (F&S) report.
Its product portfolio spans injectables, tablets, capsules, ointments, syrups, infusions, ampoules, vials, eye and ear drops, and nutraceutical formulations. The company caters to both institutional and private clients, offering formulation, loan licensing, and commercial manufacturing services, including complex generics in sustained and modified release formats.
Cotec’s hybrid business model serves government agencies, private customers, and institutional clients. It counts leading Indian pharma companies such as Mankind Pharma, Zydus’s subsidiary German Remedies, Albert David, Jagsonpal, Bion Therapeutics, and Makers Labs among its customers.
Over FY23–FY25, Cotec served 122–177 customers annually, with a sharp tilt toward repeat business — over 92% of FY25 revenue came from repeat clients. Its top 10 customers contributed ~67% of FY25 revenue, with its largest client alone accounting for 25%. This underscores strong customer stickiness, but also highlights concentration risks.
Financial Performance
Cotec has posted robust growth in recent years:
| Particulars | FY23 | FY24 | FY25 | CAGR (FY23–25) |
|---|---|---|---|---|
| Revenue from Operations | 82.42 | 138.00 | 192.24 | 52.72% |
| EBITDA | 9.51 | 17.12 | 31.44 | 81.79% |
| EBITDA Margin (%) | 11.54% | 12.41% | 16.36% | – |
| Profit After Tax (PAT) | 5.03 | 10.46 | 20.00 | 99.36% |
| PAT Margin (%) | 6.11% | 7.58% | 10.40% | – |
| Net Worth | 28.34 | 38.90 | 58.97 | – |
| Total Borrowings | 11.24 | 15.49 | 26.07 | – |
| Return on Net Worth (RoNW) | 17.76% | 26.89% | 33.91% | – |
| Return on Capital Employed (RoCE) | 21.49% | 33.31% | 36.43% | – |
| EPS – Basic & Diluted (INR) | 0.44 | 0.92 | 1.75 | – |
Manufacturing Footprint
The company operates a 21,872 sq.m facility in Roorkee with three dedicated units and an installed capacity of 4,595 million units as of FY26.
Cotec has invested heavily in automation and compliance — its facilities are ISO 9001, ISO 14001, ISO 45001 certified, GMP-compliant (India, Philippines, Kenya), and have passed SMETA ethical audits.
The company is also in the process of establishing a new EU-GMP compliant unit with capacity of 12,008 million units, featuring a high-capacity oral solid dosage (OSD) block, dedicated oncology unit, penicillin portfolio, and sterile manufacturing lines for ampoules, vials, and FFS eye drops. Upon completion, Cotec’s total capacity will rise to 16,603 million units.
This expansion will be partly funded through IPO proceeds, with INR 226.25 crore earmarked for the project.
Industry Context
The Indian Pharmaceutical Market (IPM) is poised for significant growth, projected to expand from USD 16.6 billion (~INR 1.46 lakh crore) in 2019 to USD 38.3 billion (~INR 3.38 lakh crore) by 2029. Generics dominate the market, accounting for 80–90% share, while biologics and biosimilars are gaining traction.
The CDMO segment, in particular, is witnessing consolidation with rising regulatory compliance costs and capital intensity creating high entry barriers. Industry analysts note that stricter Schedule M guidelines under India’s Drugs and Cosmetics Act are expected to benefit larger, well-capitalized CDMOs like Cotec.
Cotec has already registered over 410 formulations domestically and internationally and exports to 14 countries, including Myanmar, Cambodia, Nigeria, Mozambique, Mongolia, Turkmenistan, and Kenya.
Strategic Priorities
The company has outlined clear growth strategies in its DRHP:
- Capacity Expansion: Commission its new EU-GMP facility to target regulated markets, including Europe.
- Oncology Foray: Establish a dedicated oncology line to tap into the world’s largest and fastest-growing chronic therapy area, valued at USD 182.9 (~INR 16.14 lakh crore) billion in 2024 and expected to reach USD 262.7 billion (~INR 23.18 lakh crore) by 2029.
- Geographical Expansion: Broaden exports beyond the current 14 countries into Central Asia, Africa, Latin America, and the Middle East.
- Deepen Customer Relationships: Increase wallet share from existing clients, while adding new high-value customers for complex generics and specialty products.
Risks and Considerations
Cotec’s growth trajectory appears strong, but risks remain:
- Revenue concentration with top clients contributes significantly to topline.
- Regulatory risks — strict domestic and international compliance is critical.
- High capex intensity — expansion plans demand large upfront investment.
- First-time IPO — no prior market benchmark for valuation or liquidity.
Promoter Shareholding
Pre-offer, Cotec is closely held by the promoters:
- Harsh Tiwari – 73.7%
- Vandana Tiwari – 24.4%
- Harsh Tiwari HUF – 1.9%
(Combined: ~99.98% ownership)
Post-IPO, promoter holdings will dilute due to both the fresh issue and OFS.
Conclusion
Cotec Healthcare IPO filing reflects the company’s ambition to scale up from being a leading domestic CDMO player to a globally competitive manufacturer with oncology and specialty capabilities. Its strong financial growth, diversified portfolio, high repeat customer share, and aggressive capacity expansion plans position it as a significant contender in India’s evolving pharmaceutical outsourcing landscape.
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