The Rs 6,480-crore IPO of Gland Pharma, will be the only listed player in the pure formulations space in India, has subscribed 4.5 percent on November 9, the first day of bidding.
The public issue has received bids for 12.69 lakh equity shares against IPO size of over 3.02 crore equity shares, the data available on the exchanges showed.
The IPO size excludes anchor book portion of over 1.29 crore equity shares as the company has already garnered Rs 1,944 crore from 70 anchor investors on November 6, a day before the issue opened.
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The qualified institutional buyers have not started putting bids for the issue yet, while the portion set aside for non-institutional investors witnessed subscription of 0.86 percent and that of retail investors 7.74 percent.
The public issue consists a fresh issue of Rs 1,250 crore and an offer for sale of over 3.48 crore equity shares by promoters and selling shareholders. The price band for the issue has been fixed at Rs 1,490-1,500 per share.
Here's why Gland Pharma IPO premium fell significantly in grey market
"The offer is priced at P/E of around 18.52x on annualized EPS of the quarter ended June 2020. Gland Pharma is one of the biggest pharma IPOs. The company has a focus on complex injectables which has high entry barriers and strategic partnerships to penetrate new markets like China which can prove to be a lucrative opportunity for the company," GEPL Capital said.
With a strong product pipeline and more complex products under development, focus on B2B expansion and licensing and opportunities to enter more therapy areas, the offer looks attractive, hence the brokerage recommended a subscribe to the offer.
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Gland has presence in sterile injectables, oncology and ophthalmics, and focus on complex injectables, NCE-1s, First to-File products. It has seven manufacturing facilities in India, comprising 4 finished formulation facilities and 3 API facilities.
Gland Pharma, which is promoted by Shanghai Fosun Pharma, sells its products primarily under a business to business (B2B) model in over 60 countries as of June 2020, including the United States, Europe, Canada, Australia, India and the Rest of the world.
It also has an extensive track record in complex injectables development, manufacturing and marketing and a close understanding of the related sophisticated scientific, technical and regulatory processes. Around 33 percemt of the API requirement is imported from China as of FY20.
The company has 267 ANDA filings comprising 191 ANDA filings for sterile injectables, 50 for oncology and 26 for ophthalmics related products, of which 215 have been approved. Around 62 percent of revenues are derived from USA.
Promoter Shanghai Fosun Pharma acquired 74 percent stake in Gland Pharma for about $1.1 billion in 2017. This stake will be reduced to 58 percent post offer.
The promoter and selling shareholders (Gland Celsus Bio Chemicals, Empower Discretionary Trust and Nilay Discretionary Trust) will receive money via offer for sale, while the company will receive only fresh issue money, which will be utilised for funding incremental working capital requirements, funding capital expenditure requirements and general corporate purposes.
The company has strong financials with revenue growing at a CAGR of 27 percent, PAT at a 55 percent CAGR during FY18-FY20 with margin expansion of 328bps in same period.