Pharma company Supriya Lifescience has been getting strong demand in the grey market as it traded at a massive 91 percent premium over its upper issue price band, ahead of the public issue.
The subscription for the offer will start from December 16 and run till December 20. Anchor book, if any, will open for a day on December 15.
Supriya Lifescience is one of the Indian manufacturers and suppliers of active pharmaceuticals ingredients (API) with a focus on research and development. The company has a niche product portfolio of 38 APIs as of October 2021.
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Its product portfolio diversified across different therapeutic segments such as antihistamine, analgesic, anaesthetic, vitamin, anti-asthmatic and antiallergic. “We have a positive outlook on the Supriya Lifescience IPO,” said Yash Gupta, Equity Research Analyst at Angel One.
Supriya’s share was available at a price of Rs 524 in the grey market, a massive Rs 250 or 91.2 percent premium over its upper issue price band of Rs 274, as per the IPO Watch and IPO Central.
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The grey market is an unofficial platform for trading in IPO shares. The trading in grey market starts with the announcement of the price band for a particular IPO, and continues till the company lists its shares on the bourses.
This would be 64th initial public offering floated this year. With this, the total fund raising through IPOs will reach Rs 1.3 lakh crore, the highest ever in a single year in the history of Indian capital markets.
Supriya Lifescience is planning to raise Rs 700 crore through its public offer that comprises fresh issuance of shares worth Rs 200 crore and an offer-for-sale of Rs 500 crore by promoter Satish Waman Wagh, the only owner of the company with 100 percent shareholding.
The price band for offer has been fixed at Rs 265-274 per equity share.
The company will utilise the net proceeds of its fresh issue for capital expenditure and repaying of debts, besides general corporate purposes. And the offer-for-sale money will go to promoter Satish Waman Wagh.
Supriya Life’s pharmaceutical business is divided into domestic and export sales. It has consistently been the largest exporter of chlorpheniramine maleate and ketamine hydrochloride from India, contributing to 45-50 percent and 60-65 percent, respectively, of the API exports from India, between FY17 and FY21. It was among the largest exporters of salbutamol sulphate in India, contributing to 31 percent of the API exports in FY21 in volume terms.
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The company’s Europe business contributed to 17.40 percent, Latin America 19.15 percent, Asia (excluding India) 29.27 percent, North America 4.76 percent, and India contributed 22.53 percent of total revenue in the year FY21.
Supriya’s customers include global pharma companies such as Syntec Do Brasil LTDA, American International Chemical Inc and AT Planejamento E Desenbolvimento De Negocios Ltda, with whom it has a business relationship for over nine years. It has business relationship with Suan Farma Inc, Acme Generics LLP, Akum Drugs and Mankind Pharma Ltd, for over four years.
Supriya Lifescience recorded healthy growth in its profit at Rs 123.83 crore for the financial year FY21, compared to Rs 73.4 crore in the previous year. Revenue for the year FY21 at Rs 385.36 crore increased from Rs 311.64 crore in FY20.
In the six months ended September 2021, the company clocked profit at Rs 65.96 crore on a revenue of Rs 224.8 crore.
After closing the public issue on December 20, the pharma company will finalise the share allotment by December 23. The funds will be credited to the bank accounts of unsuccessful investors by December 24 and equity shares will be transferred to eligible investors’ demat accounts by December 27.
Finally, the trading in equity shares will commence with effect from December 28.
The IPO is handled by merchant bankers ICICI Securities and Axis Capital, while Link Intime India is the registrar to the offer.
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