Glenmark Life Sciences Limited opened with its Rs 1,514-crore initial public offering (IPO) on July 27. Thursday marks the third and final day that the IPO is open for subscription and so far it has seen robust participation from investors. Glenmark Life Sciences IPO was subscribed a total of 5.78 times on July 28, which was day two of the IPO. The company hit this number by the end of the day at 17:00 IST on Wednesday. The public issue saw active participation from all three categories of investors – the retail investors, Qualified Institutional Buyers (QIBs) and Non-Institutional Investors (NIIs). The retail segment of investors subscribed to the IPO 9.28 times. The QIBs on the other hand subscribed a total of 1.38 times at the end of the subscription day on Wednesday, and the NII category saw a subscription of 3.39 times for the same, as per information from Chittorgarh.
As far as allocations go, the public issue for the company had a reservation of 35 per cent for the retail segment investors. The NII category has a reserved investor portion of 15 per cent and the QIB segment had a reservation of 50 per cent allocated for them. The retail investors were, however, allowed to apply for up to 13 lots at the upper limit of the lot size. Speaking of, the Lot size range started at 20 shares with Rs 14,400 as the minimal application price, while the higher end saw an application price of Rs 187,200 at 260 shares.
The Grey Market Premium (GMP) for Glenmark Life Sciences, stood at Rs 140 on July 29. This stands against the initial price band of the IPO which is Rs 695 to Rs 720 per share. Having said that, this would indicate that the day-3 trading of premiums on the unlisted market stands at Rs 835 to Rs 860 per share over the baseline price band of the issue.
The IPO consists of a Fresh Issue worth Rs 1,060 crore with equity shares of Rs 2 per share. The other half of it consists of an Offer for Sale (OFS) which aggregates up to Rs 453.60 crore with 6,300,00 shares with an equity of Rs 2 per share, as per information from Chittorgarh. The overall face value of this issue is set at Rs 2 per equity share. The IPO is set to close by day’s end today. After this, the important dates come in August when the post-IPO activity is set to take place.
The first post-IPO date is August 3, when the Basis of Allotment is set to take place. On the following day, August 4, the Initiation of Refunds will likely happen for the unlucky bidders. The accreditation of shares to successful bidders’ Demat accounts will likely happen on August 5. For those anxious investors, the final listing date is yet to be confirmed, but tentatively it stands as August 6, 2021.
Glenmark Life Science’s IPO has an issue objective to use the proceeds from the fresh issue to meet the outstanding payments of purchase consideration to the promoter for the spin-off of the API business from the promoter into the company. The other objectives are to use the finances to push up on expenditure requirements and meet the expenses of general corporate activities.
Speaking on the Glenmark Life Sciences IPO, Yash Gupta Equity Research Associate, Angel Broking Ltd said, “We have seen a correction in pharma stocks after the Q1FY2022 results and some company specific issues like that of Dr.Reddy laboratories. Overall large cap pharma cracked down by 5%-10% in the last 2 trading sessions and midcaps pharma companies holding on to slight gains. Glenmark Life Science has a product portfolio related to API’s and that too on the speciality side, company is a leading manufacturer of specialized APIs for chronic therapeutic areas like CVS, CNS. So we don’t expect any major impact on Glenmark Life Science IPO due to this melt down in the pharma sector.”
Gupta then added, “Glenmark Life has a better return ratio than its peers and IPO has been priced at PE 22.38x and EV/EBITDA of 12.9x which is better than listed peers of the company. We suggest short term investors as well as long term investors to apply for the Glenmark Life Science Limited IPO. As of now IPO is getting very good response from retail as well as NII investors categories, IPO oversubscribed by 4 times as of now.”
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