The initial public offering of Corona Remedies opened for public subscription today, December 8. The maiden issue of the pharma company has been subscribed 62 percent on Day 1.
The IPO received bids for 28.17 lakh shares, as against the offer size of 45.72 lakh shares, according to data on NSE. Retail investors have booked 87 percent of their reserved portion, while Non-Institutional Investors (NII) have subscribed 79 percent of their allotted quota. Qualified Institutional Buyers (QIB) are yet to make any substantial bid for the IPO.
Ahead of listing, the unlisted shares of Corona Remedies were trading with nearly 25 percent grey market premium over the IPO price, according to data on Investorgain. This has fallen from the 34 percent GMP quoted by the site on Friday.
However, the grey market estimates still signal a strong listing for the company.
Corona Remedies launched its IPO today to raise more than Rs 655 crore through an entirely offer for sale (OFS) of shares with no fresh issue component. This means that all of the IPO proceeds will go the selling investors and not the company.
The price band for the IPO has been set at Rs 1,008-1,062 per share. Investors can bid for a minimum of 14 shares, requiring an investment of Rs 14,868 per lot, and in multiples thereafter. The IPO will remain open for public bidding between December 8 and December 10. The allotments are likely to be finalized by December 11, and the shares are scheduled to be listed on stock exchanges BSE and NSE on December 15.
Corona Remedies IPO is entirely an offer-for-sale, which means that the market will look at the issue solely from a fundamental perspective, that is how strong the margins are, how deep the product portfolio is, and how consistent the growth is, said Siddharth Maurya, Founder & Managing Director, Vibhavangal Anukulakara Pvt. Ltd.
"The company boasts a decent presence in the leading therapeutic areas, however, its profit figures are lower than those of some of its competitors," the analyst said. He added that investors should position this offering as one in the pharma sector that will generate steady returns over time instead of that which can bring quick profits.
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