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

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

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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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Glenmark Life IPO opens today: GMP, issue price, other things to know before you subscribe

Glenmark Life Sciences Limited’s initial public offering (IPO) opens 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.

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 opens Today; grey market premium at 20%, should you subscribe?

Glenmark Life Sciences IPO opens tomorrow,

Glenmark Life Sciences’ Rs 1,514 crore initial public offering (IPO) opens for subscription today, July 27. A subsidiary of Glenmark Pharmaceuticals, Glenmark Life Sciences is a developer and manufacturer of select high value, non-commoditized active pharmaceutical ingredients. The public issue consists of a fresh issue of equity shares worth Rs 1,060 crore and an offer for sale by existing shareholders worth Rs 453 crore. Ahead of its IPO, Glenmark Life Sciences’ shares were trading at nearly 20% premium in the unlisted space. Glenmark Life Sciences’ public issue will be the fifth IPO to enter Dalal Street so far this month. The stock is likely to list on the bourses next month.

Investors can bid for Glenmark Life Sciences IPO at the fixed price band of Rs 695 – 720 per share in a bid lot of 20 shares. This translated to a minimum investment of Rs 14,400 on the higher end of the price band. Of the total issue size, 50% or shares worth Rs 756.8 crore are reserved for Qualified Institutional Buyers (QIB) and 15% or Rs 227 crore of the issue has been kept for Non-institutional Investors (NII). 35% of the issue or shares worth Rs 529 crore are available for retail investors to bid on. Glenmark Life Sciences said that it will use the fresh issue amount for the payment of outstanding purchase consideration for the spin-off of the API business and funding capital expenditure requirements.

Grey market premium weak

Shares of Glenmark Life Sciences were trading with a weak premium in the grey market ahead of the IPO, Manan Doshi, Cofounder of UnlistedArena, a firm dealing in unlisted & pre-IPO shares told Financial Express Online. “Currently the stock is trading at a premium of Rs 135 per share despite having strong fundamentals and bright prospects,” he added. Manan Doshi said that Glenmark Life Sciences’ issue price is reasonable for a company that could benefit from the China+1 strategy in the post-pandemic world. “Indian API players could benefit as Chinese manufacturers battle strict regulations. Glenmark Life Sciences’ CDMO business and strong also look attractive,” he added.

Should you subscribe?

Glenmark Life Sciences has a good performance execution and clean regulatory track record, according to ICICI Direct. “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 brokerage firm said in a note. Analysts at ICICI Direct value Glenmark Life Sciences at FY21 EV/EBITDA of 14.7x on upper band. ” The growth momentum also has a strong undercurrent of global API industry growth. We recommend ‘Subscribe’ to the issue,” they added.

“We assign a “Subscribe” rating for the issue on a long-term basis considering its strong focus on R&D, expansion plans (1726.6KL when completed), growth opportunity in CDMO services and expanding complex API portfolio,” said analysts at Geojit Financial Services. The brokerage firm said that at the upper price band of Rs 720, the company is available at a P/E of 25x (diluted) which appears fairly priced. However, with Glenmark’s promoter being it’s second-largest customer, analysts find a reason to be concerned.

Glenmark Life Sciences is well placed in the API business (earns ~90% of revenue) with a product portfolio of 120 products including therapy areas like cardiovascular, CNS, diabetes, anti-infectives, said Religare Broking. “It has strong relationships with leading global generic pharmaceutical companies that have helped them expand its product offerings and geographic reach,” they added. Religare Broking said it has a positive view on the company with a long term perspective.

On successfully completing its IPO, the company could join the peers such as Divis Laboratories, Laurus Labs, ShilpaMedicare, and Solara Active Pharma Sciences