Rakesh Jhunjhunwala’s firm-backed Concord Biotech IPO opens on August 4: Key things to watch out

Concord Biotech IPO comprises only an offer for sale of 2.09 crore equity shares by Helix Investment Holdings

Biotechnology firm Concord Biotech is set to launch its initial public offering (IPO) for subscription on August 4, which would be the second public issue opening next week after SBFC Finance.

The public issue comprises only an offer for sale (OFS) of 2.09 crore equity shares by Helix Investment Holdings Pte Limited, the private fund operated by Quadria Capital. With this, Helix will be exiting the company.

The Ahmedabad-based pharma company, which is backed by private equity firm Quadria Capital and the late veteran investor Rakesh Jhunjhunwala's firm Rare Enterprises, will close its public issue on August 8.

The anchor book will be launched for a day on August 3, a day before the issue opening.

Moneycontrol was the first to report saying Concord Biotech is expected to launch IPO with a size of Rs 1,500-1,600 crore in early August and is targeting a valuation between $950 million and $1 billion.

The offer, which constituted 20 percent of the post-offer paid-up equity capital, includes a reservation of up to 10,000 equity shares for company's employees.

Half of the issue is reserved for qualified institutional buyers which includes anchor book. The 15 percent portion is reserved for high networth individuals (non-institutional investors) and the remaining 35 percent for retail investors.

Click Here To Read All IPO News

Helix Investment Holdings Pte Limited, which is backed by Quadria Capital Fund LP, a healthcare-focused private equity fund in Asia, holds a 20 percent stake in the company, while big bull Rakesh Jhunjhunwala, who passed away last year, through his asset management firm RARE Enterprises (through RARE Trusts) owns 24.09 percent shareholding.

Three trusts - Aryavir Jhunjhunwala Discretionary Trust, Aryaman Jhunjhunwala Discretionary Trust, and Nishtha Jhunjhunwala Discretionary Trust - made for three children by late Rakesh Jhunjhunwala, are part of RARE Trusts.

Rakesh Jhunjhunwala and Rekha Jhunjhunwala invested in Concord Biotech in 2004.

The India-based biopharma company with three manufacturing facilities in India will not receive any money from the public issue and all the funds, excluding issue expenses, will go to the selling shareholder.

Also read: Yatharth Hospital IPO closes today, subscribed 36.15 times

After closing the issue, the company will finalise the basis of the allotment of IPO shares by August 11, and the equity shares will be credited to the demat accounts of successful investors by August 17.

The unsuccessful investors will get refunds in their bank accounts by August 14.

Concord Biotech, which commanded a market share of over 20 percent by volume in 2022 across identified fermentation-based API products, will be listing shares on the BSE and NSE on August 18.

The biopharma company manufactures select fermentation-based APIs across immunosuppressants and oncology in terms of market share, based on volume in 2022, supplying to over 70 countries including regulated markets. By March 2023, it had 23 API (active pharmaceutical ingredients) products.

On the financials front, Concord registered healthy earnings for the year ended March FY23 with profit growing 37.2 percent to Rs 240 crore and revenue increasing 20 percent to Rs 853.2 crore compared to the previous year.

EBITDA (earnings before interest, tax, depreciation and amortisation) jumped 27.3 percent to Rs 343.3 crore with a margin expansion of 240 basis points at 40.2 percent during the same period.

Kotak Mahindra Capital Company, Citigroup Global Markets India, and Jefferies India are the merchant bankers for the IPO, while Link Intime India is the registrar of the offer.