On Friday, another pharma stock, Glenmark Life Sciences, debuted on the public exchanges. On August 6, at 10 a.m., the much-anticipated stock was listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). During the subscription period from July 27 to 29, Glenmark Pharmaceuticals’ wholly-owned subsidiary received a robust response from investors.
The company’s Rs 1,513.6-crore public issuance was 44.17 times subscribed. The traders’ overwhelming reaction, acceptable valuation, good firm financials, and positive market mood all pointed to a reasonable listing for Glenmark Life Sciences IPO on Friday. The shares of Glenmark Life Sciences were listed at a premium of roughly Rs 756 to its final issue price of Rs 720.
Glenmark Life Sciences launched its initial public offering (IPO) in the last week of July, with a price range of Rs 695-720 per share. According to data from the National Stock Exchange (NSE), the IPO got bids for over 66.33 crore shares out of a total offer size of over 1.50 crore shares. The amount reserved for qualified institutional buyers (QIBs) was 36.97 times subscribed, while the portion reserved for non-institutional investors was 122.54 times subscribed. According to the report, the retail quota set out for retail individual investors (RIIs) was booked 14.63 times.
The Glenmark Life Sciences IPO is valued Rs 1,513.6 crore, with a fresh issue of equity shares worth Rs 1,060 crore and an offer for sale (OFS) by Glenmark Pharma of up to 63 lakh equity shares for Rs 453.6 crore. Glenmark Life Sciences is a prominent researcher and manufacturing of high-value, non-commoditized active pharmaceutical ingredients (APIs) in chronic therapeutic areas such as cardiovascular disease, CNS disease, pain management, and diabetes. APIs for gastrointestinal disorders, anti-infectives, and other therapeutic fields are also manufactured and sold by the company.
Given the company’s future potential, most analysts advised a subscription rating for the Glenmark Life Sciences IPO. Analysts believe the company, which is a wholly-owned subsidiary of pharma giant Glenmark Pharmaceuticals, is well-positioned in the API sector.
“Valuations are marginally better than peer firms, based on FY-2021 PE of 22x and EV/EBITDA of 12.9x at the upper price band of the IPO price. Similarly, the company has a 32.7 percent ROCE, which is among the finest. The company has a strong financial sheet and will be debt-free following the IPO. “We expect the company’s next development plan in Ankleshwar and Dahej to be the next growth driver,” said Angel Broking Ltd equities research associate Yash Gupta.