Fabtech Technologies IPO opens today: Should you subscribe to it?

Fabtech Technologies has launched its initial public offering (IPO) today, that is Monday, September 29. The biopharma engineering company is selling its shares in the range of Rs 181-191 apiece. Investors can apply for a minimum of 75 equity shares and its multiples thereafter. Bidding for the issue shall conclude on Wednesday, October 01.

The IPO of Fabtech Technologies is looking to raise a total of Rs 230.35 crore via IPO, which is entirely a fresh share sale of 1,20,60,00 equity shares. The net proceeds from the issue shall be utilized towards funding working capital needs; pursuing inorganic growth initiatives through acquisitions; and general corporate purposes .

Brokerage firms are mostly positive on the issue and suggest subscribing to it for a long-term citing its asset light business model, strong financial growth and global presence and revenue growth visibility. However, limited operating history, low conversion rates and a muted order book pose some risks for the investors.

"We recommend subscribing to the issue, as Fabtech’s proven track record combined with its scalable asset-light model offers a compelling long-term growth opportunity in the rapidly expanding global pharmaceutical infrastructure development sector," said SMIFS in its IPO note.

Fabtech's order book provides healthy revenue visibility for the coming years, reducing dependency on new client acquisitions in the short term, said BP Equities. The company is valued at a P/E multiple of 13.3 times FY25 earnings. We, thus, recommend a 'subscribe' rating for this issue," it added.

Incorporated in 2018, Mumbai-based Fabtech Technologies is a biopharma engineering company. It designs and delivers turnkey projects, including cleanroom facilities, modular systems, and customized engineering solutions. It provides end-to-end services such as design, engineering, manufacturing, installation, and project management.

Fabtech's asset-light business model, proprietary project management system, and presence across emerging markets position it well to benefit from the structural growth in global pharma capex. The healthy and diversified order book provides revenue visibility over the near term but low proposal conversion rates and dependence on third party procurement remain notable risks, said SBI Securities.

"The issue is valued at a P/E multiple of 29.7 times and an EV/Ebitda multiple of 16.9 times on post-issue capital. Between FY23-FY25, it has delivered revenue, Ebitda and adjusted PAT CAGR of 29.8 per cent, 29.1 per cent and 14.7 per cent respectively. We believe the company is fairly valued, and we assign a 'neutral' rating to the issue," it added.

For the financial year ended on March 31, 2025, Fabtech Technologies reported a net profit of Rs 46.45 crore with a revenue of Rs 335.94 crore. The company clocked a net profit of Rs 27.22 crore with a revenue of Rs 230.39 crore for the year 2023-24. The company shall command a market capitalization close to Rs 850 crore on a post issue basis.

Fabtech's strong financial performance is driven by its diversified customer base and high-margin projects, bolstered by its long-standing relationships with top-tier pharmaceutical and biotechnology clients. It continues to focus on diversifying its revenue streams by expanding into non-pharmaceutical sectors, said Ventura Securities.

"Fabtech’s commitment to technological innovation, including its proprietary project management software FabAssure, has enhanced its operational efficiency, enabling timely project execution and fostering long-term customer trust," it added with a 'subscribe' rating.

Fabtech Technologies has reserved shares worth Rs 1 crore for its eligble employees, who will get a discount of Rs 9 per share. It has reserved 50 per cent of the net offer for qualified institutional bidders (QIBs), while retail investors and non-institutional investors (NIIs) will have 15 per cent and 35 per cent allocation, respectively.

Last heard, the company was commanding a grey market premium of Rs 12-15 apiece, suggesting 9-12 per cent gains for the investors. Unistone Capital is the sole book running lead manager and Bigshare Services is the registrar of the issue. Shares of Fabtech Technologies shall be listed on both BSE and NSE, with Tuesday, October 7 as the tentative date of listing.