Indian pharmaceutical firm Hindustan Laboratories has taken a definitive step towards its stock market debut by filing a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The company's proposed initial public offering (IPO) marks a significant move for a key player in the government-focused generic medicine supply chain.
IPO Structure and Key Details
The upcoming public offer has a total size of up to 1,41,00,000 equity shares, each with a face value of ₹10. This aggregate issue is split into two components. The first is a fresh issue of up to 50,00,000 shares, intended to raise new capital for the company. The second part is an offer for sale (OFS) of up to 91,00,000 shares by the promoter, Rajesh Vasantray Doshi.
The net proceeds generated from the fresh issue portion will be directed towards funding the working capital requirements of the business and for general corporate purposes. The appointment of intermediaries is also in place, with Choice Capital Advisors Private Limited acting as the book-running lead manager and MUFG Intime India Private Limited serving as the registrar for the issue. Upon successful completion, the shares of Hindustan Laboratories are slated for listing on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
Business Model: A B2G Pharma Specialist
Hindustan Laboratories operates primarily within a business-to-government (B2G) framework. The company is engaged in the large-scale manufacturing and supply of generic medicines, which are formulations for which patents have expired and are used as cost-effective substitutes for branded drugs.
As detailed in the DRHP, the company's core revenue stream comes from contracts with government bodies. "We supply our products primarily under procurement contracts for central government projects under the Ministry of Health and Family Welfare through Government of India agencies as well as state government agencies or bodies," the document states. This model provides a stable and large-scale demand channel.
The company has established a wide pan-India footprint. During the six-month period ending September 30, 2025, and throughout Fiscal 2025, it supplied its products to 27 States and Union Territories. Its products are supplied either under brand names or generic names, based on customer requirements, but all carry the company logo to maintain brand identity and assure quality.
Market Implications and the Road Ahead
The filing of the DRHP sets the stage for Hindustan Laboratories to access public markets, providing liquidity to the promoter while raising growth capital. The IPO will offer investors exposure to a niche segment of the pharmaceutical industry that is intricately linked to public health initiatives and government spending.
The company's reliance on government contracts represents both a strength, in terms of assured offtake, and a potential area for investor scrutiny regarding pricing policies and tender cycles. The successful utilisation of the IPO proceeds for working capital will be crucial in scaling its operations to meet large government orders. The upcoming listing will be a key test of investor appetite for pharmaceutical companies with a specialised B2G focus in the Indian public market landscape.
