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Home / Market / Stock-market-news /  Alkem Labs, Dr Lal Pathlabs IPOs see full subscription on second day

Mumbai: Drug maker Alkem Laboratories Ltd and diagnostics chain Dr Lal Pathlabs, which launched their initial public offerings (IPO) on Tuesday, saw their share sales subscribed fully at the end of the second day of their offerings, according to data from stock exchanges.

At 5pm on Wednesday, the Alkem Labs IPO was subscribed 1.41 times and the Lal Pathlabs IPO was subscribed 2.64 times, data showed. Both the share sales close on 10 December.

Both share sales have seen strong demand from investors even though secondary markets have been volatile throughout this week. On Wednesday, the benchmark Sensex shed 2.35% to 25,036.05 points.

The IPO of Alkem Laboratories, the larger of the two issues, saw a subscription of 2.33 times in the institutional investor category, while the high-net-worth individual (HNI) and retail investor categories saw subscriptions of 64% and 1.41 times, respectively.

Alkem is looking to raise almost 1,350 crore through its initial share sale. It has fixed a price band of 1,020-1,050 per share. Promoters of the firm are looking to sell 10.75% of their stake as part of the issue.

According to pharma market researcher IMS, Alkem is the fifth-largest drug maker in India. The firm is engaged in the development, manufacture and sale of pharmaceutical and neutraceutical products.

In 2014-15, Alkem’s domestic and international operations accounted for 74.7% and 25.3%, respectively, of the net revenue from operations. In 2014-15, it reported a revenue of 3,177.3 crore, up 19% from a year ago. Net profit for the year was at 437 crore as against 440.2 crore the previous year.

Dr Lal Pathlabs’ IPO, which was overall subscribed 2.64 times, saw the institutional investors’ segment being subscribed 6.12 times, while the HNI and retail investor categories saw subscription of 57% and 1.55 times, respectively.

The diagnostics firm is looking to raise 632 crore through its IPO. The firm has fixed a price band of 540-550 per share for the share sale.

On Monday, the firm allocated shares worth 191.4 crore to institutional investors, as part of its anchor book allocation.

The anchor book is that portion of the IPO bankers can allot to institutional investors on a discretionary basis. Anchor-book subscription opens a day before the launch of an IPO and acts as an indicator of institutional investor interest.

Foreign institutional investors including Fidelity, T Rowe Price, JPMorgan, Morgan Stanley and Merrill Lynch bought shares as part of the anchor subscription. Domestic institutions that subscribed to the anchor book include mutual funds such as Birla Sun Life, SBI, Kotak Mahindra and ICICI Prudential.

Westbridge Capital and TA Associates, private equity investors in the firm, are selling part of their holdings in the firm through the IPO.

The firm, which was founded in 1949, reported a revenue of 662.5 crore in 2014-15 and a profit of 95 crore. The company’s revenue has grown at a compounded annual growth rate of 20.7% over the past three financial years. The diagnostics chain has a network of 172 laboratories and 1,554 collection centres across the country.

So far this year, 18 firms have raised around 11,000 crore through the IPO route, according to data from Prime Database, a primary market tracker.

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