Gland Pharma’s ₹6,480 crore IPO sails through with 2.05 times subscription2 min read . Updated: 11 Nov 2020, 07:15 PM IST
- Ahead of the IPO, the company had raised ₹1,944 crore from 70 global and domestic institutional investors as part of the anchor investor allocation
- The successful public offering will also make Gland Pharma the first Chinese owned company to list on Indian stock markets
Mumbai: China’s Fosun owned Gland Pharma Ltd initial public offering (IPO) closed successfully on Wednesday, witnessing a subscription of 2.05 times, riding on demand from institutional investors.
Gland Pharma is an integrated manufacturer of complex injectable products.
This is the largest initial public offering in the pharma sector till date. The successful IPO will see the company joining the ranks of the top 100 companies in India by market capitalization, at the issue price. Gland had fixed a price band of ₹1,490-1,500 per share for the IPO.
The successful public offering will also make Gland Pharma the first Chinese owned company to list on Indian stock markets. This comes at a time when relations between the two neighbours have been strained.
The ₹6,480 crore issue received bids for 6.22 crore shares, of the issue size of 3.02 crore shares, according to the data available on the exchange. The issue was subscribed 22% on Tuesday.
The portion of the share sale reserved for institutional investors saw strong demand on the last day, witnessing a subscription of 6.39 times, while the portion set aside for retail investors has witnessed 23% subscription and that of non-institutional investors stood at 50%.
Ahead of the IPO, the company had raised ₹1,944 crore from 70 global and domestic institutional investors as part of the anchor investor allocation.
Analysts Geojit Financial Services in its IPO noted that "At the upper price band of ₹1,500, the stock is available at a PE of 20 times on an annualised basis, which the brokerage finds attractive. With a solid business model, no listed peers and the positive outlook for pharma". The brokerage has a Subscribe rating for the issue.
"With benefits of being an an out and out integrated injectable/ophthal manufacturer and B2B functionary combined. Gland offers a compelling proposition with its unblemished regulatory track record and customer stickiness besides long-standing manufacturing pedigree, justifying premium valuation" ICICI Securities said. It has a subscribe rating to the issue.
Gland Pharma sells its products primarily under a business to business (B2B) model in over 60 countries as of June 2020 including the United States, Europe, Canada, Australia, India and the Rest of the world.
Mint reported on 5 November that the company plans to expand into China, the world’s second largest pharmaceutical market, and Africa by taking help from its Shanghai-based promoter Fosun Pharma Pte. Ltd, which has a strong presence in these markets.