Concord Biotech IPO Subscribed By 58% On Day 1; Should You Invest?

India-based biopharma company, Concord Biotech received healthy demand on the first day of its initial public offering (IPO). On August 4, the IPO subscribed by 58% of its total size driven by non-institutional investors. The company plans to raise between Rs 1,498 - 1,551 crore via this IPO. The proposed equity shares will be listed on BSE and NSE.

As per the NSE data, cumulatively, the IPO received bids of 85,05,660 equity shares -- subscribing to 58% of the total offered size of 1,46,50,957 equity shares.

The portion reserved for non-institutional investors fully subscribed by 1.01 times, while retail investors subscribed 72% of the reserved portion. Qualified institutional buyers (QIBs) showed lacklustre demand.

The IPO opened on August 4 and will close on August 8, 2023.

The 100% book building has a price band of Rs 705 apiece to Rs 741 apiece. The bid lot size is 20 Equity Shares and in multiples thereof.

Kotak Mahindra Capital Company, Citigroup Global Markets India, and Jefferies India are the book-running lead managers of the IPO, while Link Intime India is the registrar of the issue.

In its note, LKP Securities said, "Concord Biotech is a leading player in fermentation-based complex APIs with presence across major markets commanding a market share of over 20% by volume in 2022. With the increasing prevalence of chronic diseases, growth in generic drugs & export formulations segment and increasing adoption of innovator drugs coupled with China + One strategy for expanding India's export potential will continue to drive the API market."

It added, "The IPO is fully Offer for Sale and with the highest price band of Rs.741, Concord is commanding a PE of 32.3x. SUBSCRIBE."

Concord is 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, supplying to over 70 countries including regulated markets, such as the United States, Europe and Japan, and India.

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