Concord Biotech IPO: Rare Enterprises-backed Concord Biotech has set the price range for its initial public offering (IPO) at Rs 705-741 per share, with the goal of raising Rs 1,550 crore.
According to the company’s statement, the IPO will be available for subscription from August 4 to August 8. Helix Investment Holdings Pte Limited, which is backed by the private equity firm Quadria Capital, is offering 2,09,000,000 equity shares exclusively through an offer-for-sale (OFS). The eligible employees have also been provided with subscription reservations.
The company anticipates raising Rs 1,475,26 crore and Rs 1,550,59 crore, respectively, at the lower and upper ends of the price range. Investors can submit bids for a minimum of 20 equity shares and in increments of 20 thereafter.
Concord Biotech is a leading manufacturer of fermentation-based biopharmaceutical APIs, with a particular focus on immunosuppressant, oncology, anti-fungal, and anti-bacterial products. It operates three factories in Gujarat, located at Valthera, Dholka, and Limbasi.
The company currently offers 23 API products and is backed by Quadria Capital Fund and Rare Enterprises. The late billionaire investor Rakesh Jhunjhunwala and his wife Rekha founded Rare Enterprises.Co
ncord Biotech’s revenue from operations increased by 20% to Rs 853.17 crore in fiscal year 2023, compared to Rs 713 crore in the prior year. In addition, its profit after tax increased by 37% to Rs 240 crore in fiscal year 2023, up from Rs 175 crore in the prior year.
Kotak Mahindra Capital Company, Citigroup Global Markets India, and Jefferies India are the issue’s lead bookrunners. It is proposed that the equity shares be listed on both the BSE and NSE.
Should you invest in Concord Biotech’s IPO?
Concord Biotech has a strong presence in the niche market of fermentation-based APIs, especially in immunosuppressants and oncology, according to the advice of numerous brokerages. Additionally, the company has a robust pipeline of products in development and a geographically diverse presence.
The following brokerages have given the IPO a positive rating:
Canara Bank Securities
Choice Equity Broking Pvt Ltd
Dilip Davda Hem Securities
HENSEX Securities
LKP Securities Ltd
Motilal Oswal
Reliance Securities
SBICAP Securities Limited
Ventura Securities Limited
Neutral:
Capital MarketHowever, the company faces the following threats and obstacles:
The company derives a significant portion of its revenue from a small number of customers, which could negatively impact its business if there is a change in their relationship or demand.
The industry in which the company operates is highly regulated, and noncompliance with applicable laws and regulations may result in fines, sanctions, or loss of approvals. Profitability and cash flow may be affected by fluctuations in foreign exchange rates, raw material costs, and interest rates.
The brokerages that recommended subscribing to the IPO cited the company’s strong financial performance, track record of revenue growth, and niche product focus as reasons for their optimistic outlook.
The choice of whether or not to subscribe to Concord Biotech’s IPO is ultimately a personal one. Before making a decision, investors should carefully consider their investment objectives and risk tolerance.
