Zenith Drugs stock lists at 39% premium to IPO price on NSE SME

Zenith Drugs IPO: Ahead of the listing, the stock was commanding a 44 percent premium in the grey market

Zenith Drugs made a strong debut, listing at a 39.2 percent premium to the IPO price on February 27. The stock opened at Rs 110 against the issue price of Rs 79 on the NSE SME platform.

Ahead of the listing, the stock was commanding a 44 percent premium in the grey market, which is an unofficial ecosystem where shares start trading before the allotment in the IPO and until the listing day. Most investors track the grey market premium to get an idea of the listing price.

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The public offer was subscribed 179 times between February 19 and February 22. The retail portion was booked 139 times, non-institutional investors bid 368 times and qualified institutional buyers picked 106 times the allotted quota.

Zenith Drugs raised Rs 40.68 crore through a fresh issue of 51.48 lakh shares. The price band was fixed at Rs 75-79 a share.

Ahead of the IPO, the company raised Rs 10.18 crore from six anchor investors. Vikasa India EIF I Fund–Zodiac Global Opportunity Fund, Chanakya Opportunities Fund I, Moneywise Financial Services, Aries Opportunities Fund, Neomile Growth Fund- Series I and Meru Investment Fund PCC – Cell 1 took part in the anchor book.

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The company plans to use the net proceeds to purchase machinery and equipment for setting up a new unit, existing manufacturing block upgradation and working capital requirements. The remaining funds will be used for general corporate purposes.

Zenith Drugs is a pharmaceutical manufacturing and trading company based out of Indore. The company has FDA approval for more than 600 products from the Food and Drugs Administration.