Pharma company Supriya Lifescience started the first day of trade on a strong note as the stock listed with a massive 55.11 percent premium on December 28, backed by solid subscription numbers, and healthy financials with strong return ratios.
The stock opened at Rs 425 on the BSE against the issue price of Rs 274, while the opening price on the National Stock Exchange was Rs 421.
The initial public offering of the active pharmaceutical ingredients manufacturer garnered huge demand from investors as the offer was subscribed 71.51 times during December 16-20.
Non-institutional investors had put in maximum bids as their reserved portion was subscribed 161.22 times. A part set aside for retail investors was booked 56.01 times and that of qualified institutional buyers saw 31.83 times subscription.
Supriya Lifescience has mobilised Rs 700 crore via the issue, which was priced at Rs 265-274 per equity share.
All analysts had assigned a subscribe rating to the issue citing reasonable valuations, niche product portfolio, and robust financials with strong client relation.
Click Here To Read All IPO Related News
"We like Supriya Lifescience given its niche product portfolio in diverse therapeutic segments, backward integrated business model with advanced manufacturing and R&D capabilities, extensive global presence with strong clients’ relation and robust financials," said Motilal Oswal in a note wherein it recommended to "subscribe" to the issue.
"It is well placed to tap opportunity in the pharma API market given its strong pipeline focused on further diversification," it said.
The brokerage believed the issue was reasonably valued at 17.8x FY21 P/E (post issue basis) versus its peers (available at average P/E of 22.8x), even as it enjoys a similar growth trajectory.
Angel Broking also had a subscribe rating on Supriya Lifescience IPO.
"Supriya Lifescience focuses on research & development, and has a diversified niche product portfolio of APIs. The company's 77.5 percent of revenue comes from the export markets. Its key markets are USA, Europe, China and India. We believe that the company's new manufacturing unit and product launch will be growth drivers in the future," said Angel Broking.
Supriya Lifescience reported strong earnings growth as profit grew 69 percent on year to Rs 123.83 crore in FY21 and revenue surged nearly 24 percent to Rs 385.36 crore. It clocked profit of Rs 65.95 crore on revenue of Rs 224.8 crore for the six-month period ended September 2021.Disclaimer: The views and investment tips expressed by investment 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.