China's Fosun Pharma-backed Gland Pharma shares started off trade with a 14 premium compared to the issue price on November 20.
The stock opened at Rs 1,710 on the National Stock Exchange against issue price of Rs 1,500, while it was up 13.40 percent at Rs 1,701 in the opening on the BSE.
At 10:01 hours IST, the stock was trading at Rs 1,727.70, up 15.2 percent, with volumes of 29,51,584 equity shares on the National Stock Exchange.
On the BSE, it was quoting at Rs 1,728, up 15.20 percent with volumes of 1.19 lakh equity shares.
Given the good response to the IPO from qualified institutional buyers and strong financials from a diversified revenue base along with healthy cash flows, the listing was in line with expectations.
"The company has extensive and vertically integrated injectables manufacturing capabilities with a consistent regulatory compliance track record. Also, it has a track record of growth and profitability from a diversified revenue base with healthy cash flows. Hence, fundamentals of the company look strong," Astha Jain, Senior Research Analyst at Hem Securities told Moneycontrol.
Gland Pharma raised Rs 6,480 crore via public issue which consisted of a fresh issue of Rs 1,250 crore and an offer for sale of Rs 5,230 crore by the promoter and selling shareholders.
The company will use net fresh issue funds for funding working capital requirements, capital expenditure requirements and general corporate purposes.
Fosun Singapore and Shanghai Fosun Pharma are the promoters of the company. Their shareholding reduced to 58 percent in the company from 74 percent post issue.
Headquartered in Hyderabad, Gland Pharma is one of the fastest-growing generic injectables-focused companies, developing products primarily for the US. The company sells products mainly under a business-to-business (B2B) model in over 60 countries.
Gland Pharma has a consistent regulatory compliance track record and all facilities are approved by the USFDA, with no warning letters since the inception of each facility.
In the last financial years FY18-FY20, its revenue grew at a CAGR of 27 percent and PAT grew by 55 percent CAGR, having a minimal debt with debt/equity ratio at 0.01 in FY20.
In the quarter ended June 2020, Gland Pharma earned 67 percent of the revenue from the United States, 15 percent from India and rest from other countries.