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Glenmark Life Sciences made a quiet debut on the bourses with the shares of the company getting listed at Rs 751.10, a 4 per cent premium against issue price of Rs 720 per share on the BSE. On the National Stock Exchange (NSE), the stock of pharmaceuticals company opened at Rs 750 per share.
Post listing, the stock moved higher to Rs 799.50, 11 per cent higher against the issue price on the BSE. The stock hit an intra-day low of Rs 737.35 on the BSE and Rs 738 on the NSE. At 11:29 am, it was trading at Rs 772, 7 per cent above its issue price. A combined around 24 million equity shares had changed hands on the counter on the NSE and BSE.
The initial public offer (IPO) of Glenmark Life Sciences got a strong response from the investors as the issue gor subscribed 44.17 times. The institutional investor portion was subscribed 36.97 times, the wealthy investor portion was subscribed 122.54 times, and the retail portion was subscribed 14.63 times.
Glenmark Life Sciences, a developer and manufacturer of active pharmaceutical ingredients (APIs), had priced its IPO between Rs 695 and Rs 720 per equity share. A wholly-owned subsidiary of Glenmark Pharma, Glenmark Life's IPO comprised a fresh issue of Rs 1,060 crore and an offer for sale worth Rs 453.6 crore. Post the IPO, Glenmark Pharma's stake came down from 100 per cent to 82.84 per cent.
The company proposes to utilise the net proceeds from the fresh issue towards payment of outstanding purchase consideration to the promoter for the spin-off of the API business from the promoter into the company. And they are funding the capital expenditure requirements.
The company is a developer and manufacturer of select APIs in chronic therapeutic areas, including cardiovascular disease, central nervous system disease, pain management and diabetes. The company also provides contract development and manufacturing operations services to multinational and specialty pharmaceutical companies.
Analysts at Dolat Capital expect revenue contribution from newly-commercialized products to increase over the next five years. In addition, they see the complex API business as a key growth opportunity where GLS could leverage expertise in synthetic chemistry and analytical characterization to expand its existing technology platforms and complex API portfolio in oncology, peptides and iron compounds, thereby expanding existing portfolio of API products. Profit share clause in the CDMO segment could add profit optionality to this business.
"Given the company’s leadership in select high value non-commercialized APIs in chronic therapeutic areas, cost leadership, strong management, strong balance sheet, growing business, high RoNW of 46.71 per cent in the fiscal ended March 31, 2021 and reasonable valuations; we give this IPO a "Subscribe" rating," analyst at Anand Rathi Share and Stock Brokers had said in an IPO note.
