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Gland Pharma IPO subscribed 21% on 2nd day of bidding, retail portion 14%

Gland has one of the strongest pipelines in high entry barrier injectables segment, said the brokerage.

November 10, 2020 / 05:40 PM IST
 
 
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The maiden public issue of Gland Pharma, which is owned by Chinese Fosun Pharma, has seen tepid response so far on November 10, the second day of bidding.

The Rs 6,480 crore public offer has been subscribed 21 percent as it received bids for 65.03 lakh equity shares against the IPO size of 3.02 crore equity shares, the data available on the exchanges showed.

The IPO size of 3.02 crore shares excluded anchor portion through which the company already raised Rs 1,944 crore on last Friday.

The portion set aside for retail investors has seen 14.3 percent subscription and that of non-institutional investors 2.3 percent, while the reserved portion of qualified institutional investors has subscribed 47.8 percent.

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Gland Pharma launched public issue on November 9 with a price band of Rs 1,490-1,500 per share, consisting a fresh issue of Rs 1,250 crore and an offer for sale of over 3.48 crore equity shares by the promoter and selling shareholders.

"With benefits of being an out and out integrated injectable/ophthal manufacturer and B2B functionary combined, Gland offers a compelling proposition with its unblemished regulatory track record and customer stickiness besides long-standing manufacturing pedigree, justifying premium valuation," said ICICI Direct which has a subscribe recommendation on the stock.

Gland Pharma IPO: 10 key things you should know before subscribing

Established in Hyderabad in 1978, Gland Pharma is one of the largest and the fastest-growing injectable-focused B2B companies, with a global footprint across 60 countries, including the US, Europe, Canada, Australia, India and other markets. It is a niche player in sterile injectables, oncology and ophthalmic solutions with a focus on first-to-file, 505(b)(2) filings and NCE- 1s.

Gland has one of the strongest pipelines in high entry barrier injectables segment, said the brokerage. Gland's 267 ANDA filings comprise 191 ANDA filings for sterile injectables, 50 for oncology and 26 for ophthalmic related products.

Gland's primary B2B model covers IP-led, technology transfer and contract manufacturing models, complemented by a B2C model in its home market of India leveraging its brand strength and sales network ably supported by regulatory capabilities. Its B2B partners are Sagent, Apotex, Fresenius Kabi etc. in the US.

The company is professionally managed with promoters being Shanghai Fosun Pharma (74 percent stake) and has seven manufacturing facilities in India (4 formulation and 3 API facilities).

Dolat Capital also recommended a subscribe to the offer.

"The offer is priced at P/E of around 19x on annualized EPS of the quarter ended June 2020. 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. 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. Besides, Gland has still not leveraged its facilities for penems, ophthalmic, which shall further boost earnings," the brokerage reasoned.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Moneycontrol News
first published: Nov 10, 2020 12:13 pm

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