Emcure Pharmaceuticals is likely to showcase a robust stock market debut on July 10, as per trends from the grey market. The stock commands a premium of Rs 340 in the grey market, suggesting gains of around 33.73 percent.
The expectations are largely reflective of the kind of response received by the company's Rs 1,952-crore initial public offer (IPO). The issue was subscribed 67.87 times. Retail investors' category was bought 7.36 times, the Qualified Institutional Buyers (QIB) category was subscribed 191.24 times and the Non-Institutional Investors (NII) bought 49.32 times the portion reserved for them.
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"We believe the investor demand has come considering reasonable valuations and an opportunity to invest in the leading pharmaceutical company in India in the gynaecology and HIV antivirals therapeutic areas," says Prashanth Tapse, research analyst at Mehta Equities. Given the strong subscription demand and positive market sentiments, it is therefore advisable that allotted investors book profits on the listing day.
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Brokerages have viewed Emcure Pharma's IPO favorably, considering it fairly priced compared to listed peers. Sixteen brokerages have recommended subscribing to the issue.
"The company is well-positioned to capitalize on its market position and expand rapidly. Emcure plans to enter the domestic market, particularly in rural areas, with its key brands in established therapies while continuing to develop unique products to meet patient needs, Prathamesh Masdekar of StoxBox said.
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Before the public offer went live, Emcure Pharmaceuticals raised Rs 582.6 crore through an anchor book. Prominent global investors such as Abu Dhabi Investment Authority, Goldman Sachs, and Morgan Stanley acquired shares worth over Rs 71 crore from the anchor book.
"Reduction in debt post IPO will improve its bottom line commensurately. We expect a decent listing at around Rs 1,370-1390 per share, resulting in a listing premium of around 37 percent," said Amit Goel, chief global strategist at Pace 360, who advised allotted investors to book profit.
Additionally, several mutual fund houses, including SBI, HDFC, ICICI Prudential, Whiteoak Capital, Aditya Birla Sun Life Trustee, Axis, Kotak, Nippon Life India, Mirae, Franklin India, UTI, Canara Robeco, and Motilal Oswal, also participated in the anchor book.
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