Glenmark Life Sciences IPO: Glenmark Life Sciences’ IPO of Rs 1514 crore will open for subscription tomorrow, July 27. Under this issue, shares worth Rs 1060 crore will be issued fresh while shares worth Rs 453 crore will be issued by the existing shareholders under offer for sale. Before the IPO, the price of its shares in the gray market has reached a premium of 20 percent. Glenmark Life Sciences, a subsidiary of Glenmark Pharmaceuticals, manufactures Active Pharma Ingredients (APIs). Its public issue will be the fifth issue of July this month. Glenmark Life Sciences may be listed in the market next month in August.
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lot size of 20 shares
For the IPO of Glenmark Life Sciences, investors can place bids in lots of 20 shares. For this, a price of Rs 695-720 per share has been fixed i.e. according to the upper price band, investors will have to invest at least Rs 14400. 50 per cent of the shares worth Rs 756.8 crore are reserved for Qualified Institutional Buyers (QIBs) and 15 per cent of Rs 227 crore for Non-Institutional Investors (NIIs). 35 per cent of the issue, valued at around Rs 529 crore, is reserved for retail investors. Funds received through the fresh issue will be used for capital expenditure and out-standing purchases.
Weak premium in gray market
Before the IPO, Glenmark Life Sciences was trading at a weak premium in the gray market. According to Mannan Doshi, co-founder of UnlistedArena, the stock is currently trading at a premium of just Rs 135 per share despite strong fundamentals and bright prospectus. According to Doshi, the issue price fixed by the company is reasonable and may prove beneficial after the corona has passed. Chinese companies are facing stricter regulations, which can benefit Indian API players.
This is the opinion of experts regarding subscription
Analysts at Geojit Financial Services have given subscribe rating to the issue for long term investment. This rating has been given by analysts on the basis of specific focus on R&D, growth opportunities in CDMO services, expansion in complex API portfolio etc. According to the brokerage firm, it is available at 25x the upper price band of Rs 720 for the issue, which is a better price.
The company produces around 120 products and the API business generates substantial revenue. According to Religare Broking, Glammark Life Sciences has strong associations with leading generic pharma companies across the world through which the company has expanded its product portfolio and expanded its presence in many countries. In such a situation, Religare Broking has also shown a positive stance on the issue of the company with a long term prospect.
(Article: Kshitij Bhargava)