Glenmark Life Sciences IPO fully subscribed on Day 1 but grey market premium slips

Glenmark Life Sciences IPO fully subscribed on Day 1 but grey market premium slips

On the initial day of bidding, Glenmark Life Sciences continued to trade at a weak premium in the grey market.

Glenmark Life Sciences initial public offering (IPO) opened today and received a strong response from investors, fully subscribing to the issue in less than two hours. Retail investors lead the charge oversubscribing the issue. Glenmark Life Sciences, a subsidiary of the already listed Glenmark Pharmaceuticals, is a developer and manufacturer of high value, non-commoditized APIs in chronic therapeutic areas with a strong partnership with global players. The Rs 1,541 crore public issue is a mix of fresh issue of equity shares and an offer for sale (OFS) by existing shareholders. On the initial day of bidding, Glenmark Life Sciences continued to trade at a weak premium in the grey market.

So far, retail investors have subscribed to the issue 4.87 times. Retail investor interest has been strong for the public issue, subscribing to their quota of the issue within the initial hour. Non-institutional investors have subscribed to the issue 0.77 times so far. Meanwhile, Qualified Institutional Buyers (QIB) are yet to bid for the issue in any significant quantity. 50% of the IPO is reserved for QIBs while 35% is for retail investors and the remaining 15% is for NIIs. Overall the issue has been subscribed 2.61 times with investors bidding for 3.84 crore equity shares from the 1.5 crore on offer.

Grey market premium weak

In the unlisted space, Glenmark Life Sciences was trading in the range of Rs 125-150 per share. “The movement has been weak. It opened earlier at around Rs 300 per share but has now slipped,” Sandip Ginodia, CEO, Abhishek Securities told Financial Express Online. Ahead of the issue, Glenmark Life Sciences was trading at a premium of Rs 135 per share in the grey market.

Should you subscribe?

The company will get Rs 1,060 from the issue while the rest will go to the selling shareholders as part of the OFS. Glenmark plans to pay off business purchase considerations. “This will eradicate the interest obligations of the company and PAT margins will exceed further,” said Kaushlendra Singh Sengar Founder & CEO at INVEST19. “Backed by strong promoters and received 38 inspections and audits by global regulators, Glenmark Life Sciences IPO deserves ‘Subscription’. As a subsidiary of Glenmark pharmaceuticals, the learning curve of the company is high in maintaining its manufacturing facilities,” he added.

Glenmark Life Sciences has a strong regulatory record, having not received any warning letters/import alerts from regulatory authorities. On the upper end of the price band, analysts at ICICI Direct say the issue is priced at FY21 EV/EBITDA of 14.7x. ICICI Direct has a subscribe rating on the stock.

Glenmark Life IPO: GMP, subscription status and other details

Glenmark Life Sciences Limited’s initial public offering (IPO) has opened for subscription today and will be opened for bidding till July 29. The price band for the initial share sale is fixed at ₹695-720 per share. Its IPO size has been reduced as it will now consist of a fresh issue of ₹1,060 crore and offer for sale (OFS) of up to 63 lakh shares by its promoter Glenmark Pharma. The company is aiming to raise ₹1,515 crore through its share sale.

At the end of Day 1, Glenmark Life IPO has been oversubscribed at 2.8 times, led by good response from the retail investors. The portion set aside for retail individuals has been subscribed over 5 times.

As per market observers, Glenmark Life shares were available at a premium of ₹110 in the grey market. The grey market is an unofficial platform, wherein trading starts after the announcement of IPO price band till the listing of IPO shares. The expected date of listing on the stock exchanges is August 6.

ICICI Direct in a note said, ‘‘GLS has a good performance execution and clean regulatory track record. The company is also a leading developer and manufacturer of select high value, non-commoditised APIs in chronic therapies and works with 16 of the 20 largest generic companies globally. The growth momentum also has a strong undercurrent of global API industry growth. We recommend Subscribe to the issue.’’

‘‘The company has a ROCE of 46.7% which is better than its peers like Divis labs, at an upper price band of ₹720 company is priced at PE of 22.38 which is better than all the API manufacturing companies. Overall company’s valuations are very attractive and we expect very good listing gains of around 25%-35%. We have a positive outlook on Glenmark Life science IPO,’’ Yash Gupta, Equity Research Associate, Angel Broking said.

Kotak Mahindra Capital Company, BofA Securities India and Goldman Sachs (India) Securities Private Limited are the global co-ordinators and Book Running Lead Managers to the Offer. DAM Capital Advisors Limited (Formerly known as IDFC Securities Limited), BOB Capital Markets Limited and SBI Capital Markets Limited are the Book Running Lead Managers to the Offer.

Glenmark Life is a manufacturer of select high value, non-commoditized active pharmaceutical ingredients (APIs) in chronic therapeutic areas. Glenmark Pharma holds 100% stake in Glenmark Life Sciences. For the year ended March 31, the company had revenue of ₹1,537 crore and net profit of ₹314 crore.

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Glenmark Life Sciences IPO: Subscription begins today, Check price band and GMP

Follow us on Image Source : GLENMARKLIFESCIENCES.COM Glenmark Life Sciences IPO

Glenmark Life Sciences IPO Date, Price, GMP: Glenmark Life Sciences IPO will open for subscription today. The price band of Glenmark Life Sciences IPO has been fixed at Rs 695-720 a share. A retail investor can bid for a total of 13 lots. The public issue will close on July 29.

Glenmark Life Sciences IPO will have fresh issue of equity shares worth up to Rs 1,060 crore and sale of up to 63 lakh equity shares by Glenmark Pharma. At the upper end of the price band, the IPO will fetch Rs 1,513.6 crore. Half of the total issue has been reserved for qualified institutional buyers, 35 per cent for retail investors, and remaining 15 per cent for non-institutional investors.

Ahead of the public offer, the company has raised Rs 454 crore from anchor investors. The company has decided to allocate 63,06,660 equity shares to 19 anchor investors at Rs 720 a share, aggregating to Rs 454 crore.

Glenmark Life Sciences GMP

The unlisted shares of Glenmark Life Sciences in the grey market are commanding a premium of 20 per cent. Apiece share is trading at Rs 860-870 in the grey market.

Proceeds from the fresh issue will be used towards payment of outstanding purchase consideration to the promoter for the spin-off of the API business and funding the capital expenditure requirements.

Glenmark Life Sciences, a subsidiary of Glenmark Pharmaceuticals, is a leading developer and manufacturer of select high value, non-commoditised active pharmaceutical ingredients (APIs) in chronic therapeutic areas, including cardiovascular disease, central nervous system disease, pain management and diabetes. The company also manufactures and sells APIs for gastro-intestinal disorders, anti-infectives and other therapeutic areas.

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