Shares of Concord Biotech, backed by late Rakesh Jhunjhunwala’s RARE Trusts, made a stellar debut on the domestic stock exchanges, in an otherwise bearish broader market. The stock of the biotechnology company opened 21.46% higher at ₹900.05 on the BSE and NSE, against the public issue price of ₹741 per share.
Post listing, the shares of Ahmedabad-based company gained as much as 25% to hit a high of ₹925.90 on the NSE, while it touched a high of ₹934.90 on the BSE, up 26.2% against the issue price in the first hour of trade so far. The market capitalisation stood at ₹9,760 crore at the time of reporting, with a total of 1.4 crore shares changing hands over the counter on the BSE and the NSE.
The strong listing of Concord Biotech was in line with Street expectations as the initial public offering (IPO) of the biotechnology company had received good response from investors amid strong fundamentals and attractive valuation as compared to its industry counterparts.
“The listing of Concord Biotech was in line with expectations. The company's strong fundamentals and good subscription levels were positive factors for this. Investors who participated in the IPO should consider booking profits post-listing,” says Anubhuti Mishra, Equity Research Analyst at Swastika Investmart.
Several brokerages, including LKP Research, Reliance Securities, Choice Broking, Motilal Oswal, SBI Securities, SMC Capital, and Ventura Securities have backed the IPO of Concord Biotech.
The ₹1,551-crore IPO of Concord Biotech was subscribed 24.87 times, during the three-day bidding process, which opened between August 4-8. The shares of Concord Biotech were sold in the price range of ₹705-741 apiece. The lot size for the IPO was 20 equity shares and in multiples of 20 shares thereafter. This means, the minimum application amount was ₹14,820 for a single lot and ₹1,92,660 for a maximum of 13 lots (260 shares) at the upper end of the price band.
The issue was completely an offer for sale (OFS) by Quadria Capital-backed Helix Investment Holdings Pte, which exited the company by selling its entire 20% stake. The company had reserved up to 10,000 equity shares for its employees, which were offered at a discount of ₹70 per share to the final offer price.
The quota reserved for qualified institutional buyers (QIBs) was subscribed 67.67 times, while the non-institutional investors' (NIIs) segment was booked 16.99 times. The portion reserved for retail investors received 3.78 times bids, while the employee portion was booked 24.48 times. As per the document filed with SEBI, the company had reserved half of the offer size for QIBs including anchor book, 15% for NIIs, and the remaining 35% for retail investors.
Established in 1984, Concord Biotech is a homegrown R&D-driven biopharma company, which manufactures Active Pharmaceutical Ingredients (API) through fermentation & semi-synthetic process and finished formulations. It is one of the leading manufacturers of select fermentation-based APIs across immunosuppressants and oncology in terms of market share, based on volume in 2022, supplying to over 70 countries including regulated markets, such as the United States, Europe and Japan, and India.
As of March 31, 2023, the company had a total installed fermentation capacity of 1,250 m3 (cubic meter). It had 6 fermentation-based immunosuppressant APIs, while the company aimed to continue to grow their immunosuppressant API portfolio, which will remain one of the key contributors to their API business in the near future.
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