Gland Pharma shares witnessed strong buying interest on November 20 and closed with a 21 percent premium over the issue price on the listing day despite a tepid response to its IPO.
The rally pointed to investors' believe in the company's strong fundamentals and promoters’ background, experts said.
The stock settled at Rs 1,820.45 on the BSE, a 21.36 percent premium over IPO price, while it closed with 21.30 percent gains at Rs 1,819.55 on the National Stock Exchange.
It opened with a premium of 13.4 percent at Rs 1,701 on the BSE and debuted at Rs 1,710 on the NSE, at 14 percent premium.
Gland Pharma traded with volume of 7,87,955 equity shares on the BSE and 1,13,10,647 shares on the NSE. The market capitalisation stood at Rs 29,725 crore.
"The stock is trading above its midcap pharma peers but higher valuations justified by the last 3-year revenue growth and PAT growth of 27 percent and 55 percent CAGR respectively. Any dip in price can be a good opportunity for long-term investors," Yash Gupta, Equity Research Associate at Angel Broking told Moneycontrol.
Should investors hold or book profits in Gland Pharma?
China's Fosun Pharma-owned Gland Pharma raised Rs 6,480 crore via a public issue during November 9-11.
Yash Gupta advised holding Gland Pharma with a long-term perspective as it is one of the fastest-growing generic injectable companies in the US, which accounted for 67 percent of the company's revenues in FY20.
The company exports its products to more than 60 countries with exports accounting for 82 percent of its revenue at the end of June 2020.
Prashanth Tapse, AVP Research at Mehta Equities, also said Gland Pharma had a strong B2B business model with focussed business into complex injectable, which is a high entry barrier and acts as an opportunity for the company on the long-term basis.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.