The Rs 1,551-crore initial public offering (IPO) of Concord Biotech continued to see a soft response from the investors during the second day of the bidding process.
Concord Biotech is selling its shares in the range of Rs 705-741 apiece during the three-day bidding process and investors can make a bid of a minimum of 20 equity shares and its multiples thereafter. The issue is entirely an offer-for-sale of up to 20,925,652 crore equity shares by its selling shareholder Hellix Investment Holdings.
According to BSE data, the investors made bids for 2,33,91,100 equity shares, or 1.61 times, compared to the 1,46,50,957 equity shares offered for the subscription by 1.30 pm on Monday, August 07, 2023. The issue kicked off for subscription on Friday and can be subscribed till Tuesday, August 08.
The quota for retail investors was booked 1.71 per cent, whereas the allocation for non-institutional bidders fetched 3.32 times and the portion of employees was booked 11.72 times. However, the portion of qualified institutional bidders (QIBs) was subscribed only 10 per cent as of the same time.
Incorporated in 1984, Concord Biotech is a homegrown research and development (R&D) driven biopharma company. The company is ranked among the leading global developers and manufacturers of select fermentation-based APIs across immunosuppressants and oncology, marking its presence in more than 70 countries including India, Japan, US and Europe.
A majority of the brokerages are positive on the issue and have suggested subscribing to the issue citing its strong business model, global presence and in-line valuations. However, a few analysts have suggested avoiding the issue citing its limited upside potential, complete OFS nature and dependency of large clients.
“We like Concord Biotech given its complex product portfolio, presence in niche space, strong client relationship and high entry barriers. The issue is valued at 32 times P/E in line with the peer group’s average. We believe it could benefit from the industry tailwinds given its PLI approval in place,” said Motilal Oswal Financial Services with a buy rating.
Ahead of its IPO, Concord Biotech raised Rs 464.95 crore from anchor investors by allocating them 62,74,695 shares at Rs 741 apiece, said a BSE circular. Anchor investors included the government of Singapore, Abu Dhabi Investment Authority, Government Pension Fund Global, Polar Capital Funds, HSBC Mutual Fund, WF Asian Reconnaissance Fund and Amundi Funds among others.
Concord has an established presence in the therapeutic areas and are well poised to benefit from the industry growth tailwinds. The immunosuppressant API portfolio is expected to remain one of the key contributors to the API business in the near future, said Reliance Securities, which has a buy rating on the issue.
The R&D team is working on developing new formulations for which they expect to apply for ANDA approvals from the USFDA. It sees trong global footprint, diversified products portfolio, robust in-house R&D capabilities and experienced management team as the key positives.
Kotak Mahindra Capital Company, Citigroup Global Markets India and Jefferies India are the booking running lead managers to the issue, while Link Intime India has been appointed as the registrar to the issue.
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