The largest pharma IPO (Initial Public Offering) in India worth nearly Rs 6,500 crore opened on Monday. The Hyderabad-based Gland Pharma is offering shares at Rs 1,490-1,500 per share in the issue, the proceeds of which will be used for working capital, capital expenditure and general corporate purposes.
Ahead of the IPO, Gland Pharma raised Rs 1,944 crore from anchor investors at the price of Rs 1,500 per equity share. The Government of Singapore, Nomura, Goldman Sachs, Morgan Stanley, SBI Mutual Fund and Axis Mutual Fund were among the anchor investors.
- Open from 9 to 11 November 2020
- Price band: Rs 1,490 to Rs 1,500 per equity
- Lot size: 10 shares (minimum order quantity is 1 lot)
- Expected to be listed on BSE and NSE on 20 November
- The IPO includes a fresh issue of shares worth up to Rs 1,250 crore (0.8 crore shares) and an offer of sale (OFS) of up to 3.48 crore shares.
- 35% of the shares offered are reserved for the retail segment.
- Link Intime India Pvt is the registrar for the IPO
- Kotak Mahindra Capital Company Ltd, Citigroup Global Markets India Pvt Ltd, Haitong Securities India Pvt Ltd and Nomura Financial Advisory and Securities (India) Pvt Ltd are the book running lead managers.
About the company
Established in 1978, Gland Pharma is in the business of manufacturing and marketing complex injectables. It is one of the fastest-growing generic injectable companies with a presence in 60 countries as of June 2020 including the US, Australia and Canada. It sells its products primarily under a business to business (B2B) model.
The Hyderabad-based company has seven manufacturing facilities in India. Its largest stakeholder is China's Fosun Pharma which had acquired a 74 percent stake in the company in 2017.
After the IPO, Fosun's stake in the company will fall to 58 percent.
Should you subscribe to Gland Pharma IPO?
Most brokerages have a "Subscribe" rating for the issue.
"At the upper price band of Rs 1,500, Gland Pharma is available at a PE of 20x on an annualised basis, which appears attractive. With a solid business model, no listed peers and the positive outlook for pharma, we assign a subscribe rating for the issue," Geojit Financial Services said, recommending "Subscribe" to the IPO.
The brokerage further said that the pharma company reported strong growth in revenue (CAGR of 27 percent) and PAT (55 percent CAGR) in FY18-20, with 3.28 percent margin expansion. It also noted that the company has a minimal debt with a debt/equity ratio at 0.01 in the financial year 2019-20.
Geojit Financial Services said that Gland Pharma's focus on complex injectables which has high entry barriers and strategic partnerships to penetrate new markets like China which can prove to be a lucrative opportunity for the company.
With a strong product pipeline and more complex products under development, focus on B2B expansion and licensing and opportunities to enter more therapy areas, the offer looks attractive, the brokerage added.
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