Late Rakesh Jhunjhunwala | Image credit: ANI
Late Rakesh Jhunjhunwala-backed Concord Biotech's share sale via initial public offering (IPO) will close today at 5:00 pm. Concord Biotech shares are in very high demand during the ongoing share sale as the IPO was subscribed 3.72 times by 11:36 am, data from the National Stock Exchange showed.
Concord Biotech shares were in very high demand specially among the non-institutional investors as the portion reserved for them was subscribed 7.17 times. Shares reserved for retail investors was subscribed 2.67 times, pie set aside for employees was booked 18.58 times and shares set aside for Qualified Institutional Buyers (QIBs), which include large investors like foreign institutional investors, mutual funds and banks, was subscribed 2.92 times.
Concord Biotech is selling shares in price band of Rs 705-741 per share and planning to raise Rs 1,551 crore from the IPO which is purely an offer for sale by its selling shareholder Helix Investment Holdings Pte Limited which holds 20 per cent stake in the company, while late Rakesh Jhunjhunwala through his asset management firm RARE Enterprises held 24.09 per cent shareholding.
The objectives of the IPO are to achieve the benefits of listing the equity shares on the stock exchanges and to carry out the offer for sale of up to 20,925,652 equity shares by the selling shareholders.
50 per cent of shares in the IPO are reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and 35 per cent for retail investors.
In 2016, Concord Biotech launched its formulation business in India (11 per cent of sales) as well as emerging markets (Nepal, Mexico, Indonesia, Thailand, Ecuador, Kenya, Singapore and Paraguay) and have further expanded to US. In India, it has built a portfolio of 27 brands across immunosuppressants, nephrology and anti-infective drugs for critical care.
Concord Biotech recorded 18 per cent compounded annual growth rate (CAGR) in revenue over FY21-23 with robust EBITDA margin of 40 per cent. Its return ratios are healthy with return on equity (RoE) and return on capital employed (RoCE) of 20 per cent and 19 per cent respectively.
“We like CBL given its complex product portfolio, presence in niche space, strong client relationship and high entry barriers. The issue is valued at 32 times price to earnings (P/E) in line with peer group’s average 32 times. We believe CBL could benefit from the industry tailwinds given its PLI approval in place. Hence we recommend Subscribe,” brokerage firm Motilal Oswal said.
Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited and Jefferies India Private Limited are the book running lead managers of the IPO.
Concord Biotech is a 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 in terms of market share, based on volume in 2022.
Concord Biotech has a Global presence. They are supplying their products to over 70 countries including the US, India, Europe, and Japan.
The company manufactures Active Pharmaceutical Ingredients (API) through fermentation & semi-synthetic process and finished formulations. It started with a single product and has grown to become a wide-spectrum solution provider.