Concord Biotech IPO Subscription Day 3: Rakesh Jhunjhunwala’s RARE Enterprises-backed Concord Biotech’s initial public offering (IPO) has been fully subscribed on day 2 as it received strong demand from retail as well as non-institutional investors.
The Concord Biotech IPO has been subscribed 2.72 times in total as the issue received bids for 3.97 crore equity shares as against 1.46 crore shares on the offer on August 7, the second day of the bidding process. Today is the last day to subscribe to the public offer. Rekha Jhunjhunwala-owned RARE Enterprises holds 24.09 per cent stake in Concord Biotech.
The public issue aims to raise Rs 1,551 crore and the book build issue is complete offer for sale (OFS) in nature. The bio-pharma company has fixed Concord Biotech IPO price band at Rs 705 to Rs 741 per equity share.
Concord Biotech IPO: Subscription Status
The public issue received 2.26 times subscription in the retail category and 5.22 times in the Non-Institutional Investors (NII) category. The quota for Qualified Institutional Investors was booked 1.61 times on Monday.
Concord Biotech IPO: IPO Dates
Bidding for the offer by the biotechnology company will start from August 4, while the closing would be on August 8. The anchor book will open for a day on August 3.
Concord Biotech IPO: Price Band
The price band for the offer has been fixed at Rs 705-741 per share.
Concord Biotech IPO: IPO Size
The Ahmedabad-based pharma company is planning to raise Rs 1,550.59 crore from the public issue of over 2.09 crore equity shares or 20 percent of paid-up equity, at the upper price band.
The issue comprises only an offer-for-sale (OFS) by Helix Investment Holdings Pte Limited, which is backed by Quadria Capital Fund LP, a healthcare-focused private equity fund in Asia.
The IPO will give exit to Helix. The average cost of acquisition of 2.09 crore equity shares by Helix was Rs 227.14 per share. If we consider this, then the profit may be Rs 514 per share for Helix, i.e. amounted to around Rs 1,075 crore against buying at Rs 475.3 crore.
The offer also included reservation of 10,000 equity shares for employees, who will get those shares at a discount of Rs 70 per share.
Concord Biotech IPO: Objective of the Issue
The main objective of the issue is to carry out this offer for sale of 2.09 crore equity shares by Helix, while the company will not receive any money from the issue.
Concord Biotech IPO: Lot Size
The minimum bid by investors can be made for 20 equity shares and in multiples of 20 shares thereafter. Accordingly, the retail investors can make a minimum investment of Rs 14,820 for a single lot and their maximum investment would be Rs 1,92,660 for 13 lots (260 shares) at the upper price band, as they can invest up to Rs 2 lakh in the IPO.
The minimum investment by high networth individuals in the category of Rs 2 lakh to 10 lakh would be Rs 2,07,480 for 14 lots (280 shares) and Rs 9,92,940 would be the maximum (67 lots – 1,340 shares).
The company has reserved half of the offer size for qualified institutional buyers including anchor book, 15 percent for high networth individuals, and the remaining 35 percent for retail investors.
Concord Biotech IPO: Financials
Concord Biotech has registered healthy financial numbers for the last financial year ended March FY23, with the profit rising 37.2 percent to Rs 240 crore compared to the previous year, driven by topline and operating performance. And the revenue from operations increased by nearly 20 percent to Rs 853.2 crore during the same period.
Concord Biotech claimed to be one of 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. The company supplies products to over 70 countries including regulated markets.
Concord Biotech IPO GMP today
According to market observers, Concord Biotech IPO grey market premium (GMP) today is Rs 200.
Concord Biotech IPO: Good or bad?
On Concord Biotech IPO review, the Choice Broking report says, “At the higher price band, CBL is demanding a P/E multiple of 32.3x (to its FY23 earning), which is at a discount to the peer average. Growth in the global market of fermentation-based APIs is expected to be driven by immunology, oncology, and anti-infective therapeutic areas. CBL is focusing on these therapeutic areas with its wide range of niche & complex APIs. Moreover, considering its manufacturing capabilities and geographic presence CBL is well-placed to benefit from the expansion in the market. Thus, we assign a “SUBSCRIBE” rating for the issue.”
Giving a ‘subscribe’ tag to the public issue, the Reliance Securities report said, ” In view of strong global footprint, diversified products portfolio, robust in-house R&D capabilities and experienced management team, we recommend a SUBSCRIBE to the issue.”
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