Glenmark Life Sciences IPO Subscribed 5.90 Times On Day 2

Glenmark Life Sciences IPO Subscribed 5.90 Times On Day 2

Glenmark Life Sciences Ltd.’s Rs 1,514-crore initial public offering continued to witness strong retail investor interest on the second day of subscription.

The IPO was subscribed more than two times on the first day, led by retail demand. Institutional and non-institutional partnership also caught pace.

Glenmark Life Sciences, a unit of Glenmark Pharmaceuticals Ltd., is selling shares at Rs 695-720 apiece. This gives it a market value of Rs 8,822 crore at the upper end of the price band. The offer comprises a fresh issue of Rs 1,060 crore and offer-for-sale worth Rs 453.6 crore by the parent.

The company plans to use Rs 800 crore from the IPO proceeds to pay the parent for the acquisition of the active pharmaceutical ingredient business in 2018. It will use Rs 155 crore for brownfield capital investment at its Dahej facility to enhance the total installed capacity by 200 kilolitres. The rest will be used for additional facilities and general corporate purposes.

Prior to the IPO, the company raised Rs 454 crore by allotting 63 lakh shares to 19 anchor investors.

The IPO will close on July 29.

Glenmark Life Sciences Limited IPO: Know latest subscription status, allotment finalisation status check date and other important details

The Initial Public Offering (IPO) Glenmark Life Sciences Limited (GLS) is into the second day of its launch. Zee Business brings for its readers the response it has got till now along with the price wise bid details. GLS is a pharma company which manufactures Active Pharmaceutical Ingredients (APIs).

As of 1:144 pm on Wednesday, the issue of Glenmark Life Sciences IPO was subscribed 2.10 times. Retail Individual Investors (RIIs) subscribed this issue 3.99 times. The non-institutional investors subscribed 0.46 times. Meanwhile for 42,42,379 shares that are available for the Qualified Institutional Buyers (QIBs), the number of bids received are 16,660.

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Glenmark Life Sciences Limited IPO – Timeline

The issue ends on 29 July as per the Edelweiss app

The finalisation of allotment is likely to get completed on 4 August

The initiation of refunds likely on 5 August

The transfer of shares to demat account likely on 6 August

Listing of stock likely on 9 August

Glenmark Life Sciences will utilise the net proceeds from the fresh issue towards “payment of outstanding purchase consideration to the Promoter for the spin-off of the API business from the Promoter into the Company pursuant to the Business Purchase Agreement dated October 9, 2018,” the company has said in a release.

The proceed of fresh issues will also be used for funding the capital expenditure requirements and general corporate purposes, it further said.

Glenmark Life Sciences Limited IPO – Key Highlights

The Price Band of the offer has been fixed at Rs 695 to Rs 720 per equity share. Bids can be made for a minimum of 20 equity shares and in multiples of 20 equity shares thereafter. The offer consists of equity shares of face value of Rs 2 each of Glenmark Life Sciences Limited The issue comprises a fresh issue of equity shares aggregating to Rs 1060 cr of the fresh issue and an Offer For Sale (OFS) of up to 6.3 million equity shares by Glenmark Pharmaceuticals Limited (Promoter or Promoter Selling Shareholder). Issue Type - This Offer is being made through a Book Building Process. 15 per cent of the offer will be available for allocation to Non-Institutional Bidders 35 per cent of the offer shall be available for allocation to Retail Individual Investors.

The Global Co-ordinators and Book Running Lead Managers (BRLM) to the offer include Kotak Mahindra Capital Company Limited, BofA Securities India Limited and Goldman Sachs (India) Securities Private Limited.

DAM Capital Advisors Limited (Formerly known as IDFC Securities Limited), BOB Capital Markets Limited and SBI Capital Markets Limited are the BRLM to the offer.

Glenmark Life Sciences IPO GMP, Subscription Status, Allotment, Listing, Key Details

Glenmark Life Sciences Limited’s Rs 1,514-crore initial public offering (IPO) saw an overwhelming response on the first day of bidding. The much-awaited IPO opened for subscription on July 27. The issue will remain open for investors till July 29. Glenmark Life Sciences IPO was subscribed 2.78 times on Day 1 of bidding. The offer received 4.17 crore equity share bids, which stood against an IPO size of 1.5 crore equity shares. Reservations and subscriptions for day one also saw a significant uptake. The company had a market lot size of 20 shares on the lower end with an accompanying application price of Rs 14,400. On the upper end of the lot, Glenmark Life Sciences IPO carries a size of 260 shares at an application price of Rs 187,200.

Retail investors were allowed to apply for up to 13 lots at the uppermost limit. The qualified institutional buyers (QIBs) had a 50 per cent reservation of which, they put in 10,540 equity shares worth of bids on Day 1 of the IPO. The NII category saw an 85 per cent subscription. Individual retail bidders had a 35 per cent allocation for this IPO and it was subscribed 5.16 times.

Glenmark Life Sciences also gained an anchor booking worth Rs 454 crore on July 26, a day before the opening date of the public issue. The Grey Market Premium for the Glenmark Life Sciences stood at Rs 140 on July 28. This stands against its price band of Rs 695 to Rs 720 per share. This indicates that the shares were trading on the unlisted market at Rs 835 to Rs 860 per share over the initial price band.

The Glenmark Life Science IPO plans to raise around Rs 1,514 crore with its initial public offering, with a fresh issue of Rs 1,060 crore and an Offer for Sale (OFS) of Rs 453.60 from its shareholders. The IPO is set to close on July 29. Following this, the basis of allotment is tentatively taking place on August 3. Initiation of refunds will be on August 4, while the accreditation of shares to the successful bidders’ Demat accounts should likely take place on August 5. The listing date, though yet to be confirmed is likely on August 6.

The object of Glenmark Life Science’s IPO is to use the proceeds of the issue to complete outstanding purchase considerations to the promoter for the spin-off of the API business from the promoter and into the company pursuant to the Business Purchase Agreement, according to the draft red herring (DRH) of the company. Other expenses will include the funding of the capital expenditure requirements as well as other general corporate expenses said the report.

Speaking on the public issue, Vinit Bolinjkar, Head of Research, Ventura Securities said, “The management is looking to raise INR 1,514 cr through a maiden public offering (Rs 1060 crore through fresh issue and INR 454 cr through OFS). Of the issue proceeds Rs 800 crore will go towards repayment of the of outstanding debt (purchase consideration to Glenmark Pharma for spin off of the API business) and Rs 153 crore to fund its capex at Ankleshwar and Dahej facilities and the balance towards other corporate expenses.”

He went on to add, “We expect GLS to grow its revenue at a CAGR of 18.7% to INR 3,155 cr over the period of FY21-24E. EBITDA and net profit over the same period are set to grow at a CAGR of 16.9% to INR 945 cr and 26.2% to INR 707 cr, respectively. EBITDA margins are expected to deteriorate by 141bps (to 29.9%), since the operationalization of the new facilities would lead to an increase in overhead costs. Management aspires to maintain margins at over 30% and is undertaking a number of initiatives like, backward integration into KSM (Key Starter Material) manufacture which will help lower cost of production, optimizing sourcing mix, focus on high margin product categories and localized sourcing in case of imports.”

Glenmark Life Science specialises in the manufacturing of specialized APIs that are specifically used for chronic therapeutic areas like cardiovascular disease (CVS), central nervous system disease (CNS), diabetes, and pain management. Bolinjkar said, “It has a global footprint spanning all the regulated markets (Europe, North America, Japan) and rest of the world. Around 16 out of 20 of the largest generic companies globally are its customers and GLS generates 45-50% of its revenue from exports. Along with parent Glenmark Pharma (35% revenue contribution), these large clients ensure a steady revenue stream.”

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