Concord Biotech IPO subscribed 25% in first three hours; employees lead bidding process

The Rs 1,551-crore initial public offering (IPO) of Concord Biotech saw a positive demand from the investors during the initial few hours of the bidding process on the day one. The issue kicked off for subscription on Friday and can be subscribed till Tuesday, August 08.

Concord Biotech is selling its shares in the range of Rs 705-741 apiece during the three-day bidding process and investors can make a bid of a minimum of 20 equity shares and its multiples thereafter. The issue is entirely an offer-for-sale of up to 20,925,652 crore equity shares by its selling shareholder Hellix Investment Holdings.

According to the data, the investors made bids for 36,68,000 equity shares, or 25 per cent, compared to the 1,46,50,957 equity shares offered for the subscription by 1.10 pm on Friday, August 04, 2023.

The quota for retail investors was booked 36 per cent, whereas the allocation for non-institutional bidders fetched 32 per cent and the portion of employees was booked 3.38  times. However, the portion of qualified institutional bidders (QIBs) was not even off the mark.

Incorporated in 1984, Concord Biotech is a homegrown research and development (R&D) driven biopharma company. The company is ranked among the leading global developers and manufacturers of select fermentation-based APIs across immunosuppressants and oncology, marking its presence in more than 70 countries including India, Japan, US and Europe.

Majority of the brokerage firms are positive on the issue and have suggested subscribing to the issue citing its strong business model, global presence and in-line valuations. However, a fews analysts have suggested avoiding the issue citing its limited upside potential, complete OFS nature and dependency of large clients.

We like Concord Biotech given its complex product portfolio, presence in niche space, strong client relationship and high entry barriers. The issue is valued at 32 times P/E in line with the peer group’s average. We believe it could benefit from the industry tailwinds given its PLI approval in place, said Motilal Oswal Financial Services with a buy rating.

Ahead of its IPO, Concord Biotech raised Rs 464.95 crore from anchor investors by allocating them 62,74,695 shares at Rs 741 apiece, said a BSE circular. Anchor investors included the government of Singapore, Abu Dhabi Investment Authority, Government Pension Fund Global, Polar Capital Funds, HSBC Mutual Fund, WF Asian Reconnaissance Fund and Amundi Funds among others.

The company has established presence across the complex fermentation value chain along with global leadership in immunosuppressant APIs with a wide spectrum of complex fermentation-based APIs across multiple therapeutic areas, said Hem Securities.

"It has a diversified global customer base with longstanding relationships with key customers and experienced  promoters, management team supported by marquee investors. Also, Financial track record of rapid growth and consistent
profitability with healthy cash flows makes this issue a decent avenue to deploy the funds in," it added with a subscribe rating.

Kotak Mahindra Capital Company, Citigroup Global Markets India and Jefferies India are the booking running lead managers to the issue, while Link Intime India has been appointed as the registrar to the issue.


(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)

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