Innova Captab IPO shares to list on Friday; grey market premium nosedives

Innova Captab shares are set to make their Dalal Street debut on Friday but the company has seen a steep correction in its grey market premium after a series of dull listings earlier this week and slim trading volumes ahead of the festive season before the new year. Its premium in the unofficial market has been wiped out by about two-third.

Last heard, Innova Captab was commanding a grey market premium of Rs 65-70 apiece in the grey market, suggesting a listing pop of roughly 15 per cent of issue price of Rs 448 apiece. However, the premium in the unofficial market stood at Rs 120-125 about a day earlier and at Rs 210 apiece before the bidding for the issue kicked off.

Innova Captab's IPO was open for bidding between December 21 to December 26, which was sold in the range of Rs 426-448 apiece with a lot size of 33 equity shares. The company raised a total of Rs 570 crore, including a fresh share sale of Rs 320 crore and an offer-for-sale (OFS) of up to 55,80,357 equity shares.

The issue was overall subscribed 55.26 times, thanks to strong bidding from qualified institutional bidders (QIBs), whose quota was booked a stellar 116.73 times. The category allocation for non-institutional investors was subscribed 64.95 times. The quota reserved for retail investors was subscribed 17.15 times during the bidding process.

Prathamesh Masdekar, Research Analyst at StoxBox believes in a positive listing for the Innova Captab after strong bidding. He expects it to list at a premium of around 25 per cent. Innova Captab's strong brand recognition, long-term relationships and ongoing active engagements with distributors have helped the company to expand its product offerings and geographic reach.

"The company also has a record of sustained consolidated revenue from operations. The company's focus on branded generic products for the domestic and international markets, strong brand presence, consistent financial performance, R&D focus on building an increasingly complex product portfolio and customer stickiness have helped it to grow its business successfully," he said.

Incorporated in January 2005, Innova Captab is a pharmaceutical company operating in three business segments. It provides contract development and manufacturing services to Indian pharmaceutical companies. It also has a domestic business dealing in branded generics. Furthermore, the company has an international business that deals in branded generics.

Innova Captab has an international business that deals in branded generics. with its product portfolio includes tablets, capsules, dry syrups, dry powder injections, ointments and liquid medicines. The company produced and sold more than 600 different types of generics as of June 30, 2023.

ICICI Securities and JM Financial are the book running lead managers of the Innova Captab IPO, while Kfin Technologies is the registrar for the issue. Shares of the company will be listed on both BSE and NSE.

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