After the blockbuster July, August 2023 will be another busy month for IPO investors. Several Initial Public Offerings (IPOs) are about to hit the streets in the first week. One is the Concord Biotech IPO, backed by Late ace investor Rakesh Jhunjhunwala.
Concord Biotech IPO is due to open for public subscription on 4 August 2023, and its shares are already demanding a high premium in the grey market. But is this IPO safe for investors looking to invest long-term or even for listing gains? Continue reading to know crucial details of the IPO, including its issue size, price band, listing date, etc.
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Concord Biotech Limited is an Indian Research and Development (R&D) based biopharma company with a worldwide presence. It is of the leading global producers of Active Pharmaceutical Ingredients (APIs) and formulations through fermentation and semi-synthetic processes for usage across therapeutic areas of immunosuppressants, oncology, nephrology, and anti-infectives.
In 2022, Concord Biotech had a market share of more than 20% in terms of the total volume of all identified fermentation-based API products. As of 31 March 2023, the company was manufacturing 23 APIs and 77 approved formulations. Its products were supplied to over 200 clients across 70 countries, including the United States of America (USA), Japan, Africa, and Europe. It also has a strong presence in the domestic market.
The table below depicts the company’s financials as per the Draft Red Herring Prospectus (DRHP) it has filed with the Securities and Exchange Board of India (SEBI):
|Particulars||As of and For FY Ending March 31|
|Revenue From Operations||8,532||7,129||6,169|
|Profit After Tax||2,401||1,749||2,349|
|Earnings Per Share (Diluted)||23||17||22|
|Net Asset Value (In Rs/share)||123||105||96|
|Return on Capital Employed||24%||21%||29%|
|Return on Equity||20%||17%||27%|
*Amount in Crores
Source – DRHP as on 28 July 2023
The following are the takeaways from the financials of Concord Biotech Ltd.:
Concord Biotech IPO consists of a pure offer-for-sale of up to 20,925,652 equity shares being offloaded by Helix Investment Holdings Pte Ltd. The issue is worth Rs. 1,551 crores at its upper price band. It opens for public subscription on 4 August and closes on 8 August 2023. As a retail investor, you can bid for a minimum of 20 shares within the price band of Rs. 705 to Rs. 714 per share.
50% of the offer is reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and the remaining 35% is for retail investors.
The table below summarises the essential details of the IPO:
|IPO Date||4 Aug to 8 Aug 2023|
|Face Value||Re 1 per share|
|Price Band||Rs. 705 to Rs. 741 per share|
|Lot Size||20 shares|
|Total Issue Size||20,925,652 shares (aggregating up to Rs. 1,551 crores|
|Offer for sale||20,925,652 shares|
|Employee Discount||Rs. 70 per share|
As of 31 July 2023, Concord Biotech IPO is commanding a healthy grey market premium of Rs. 325 per share. It indicates listing gains of around 50%. However, it should not be the only reason to subscribe to this IPO. An impressive roster of investors, a strong business model, and a global customer base are other factors you can consider if investing for the long term.
If you need a Demat account to invest in this IPO, you can open it for free with Motilal Oswal.
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