Grey market – or the unofficial market for trading in unlisted shares — has been influencing subscription levels of initial public offerings on Dalal Street in recent times. And if that is to hold true again, we might have another blockbuster IPO in the offing in Gland Pharma.

The pharma company is eyeing to hit the bourses with a Rs 6,000 crore issue, which will make it the biggest IPO from the Indian pharma sector. And even before the details of the IPO are released, unlisted shares of the company are already making a splash in the grey market.

The stock is are trading at a decent premium of Rs 175-185 per share over the projected IPO price band of Rs 1,300-1,320, dealers active in the grey market said.

The biggest pharma IPO on Dalal Street till date has been Eris Lifesciences, which raised Rs 1,741 crore in 2017. This Gland issue will also be the biggest so far this year.

Narottam Dharwat of Dharawat Securities, a Mumbai-based boutique firm that deals in unlisted shares, said after a series of dull listing, Gland Pharma is expected to revive momentum in India’s primary market.

“Pharma is the flavour as of now. An extensive product portfolio, diversified business model, quality management and robust balance sheet are add-on for the company,” he said.

Some of the recent fund-raising activities and listings on Dalal Street have seen lacklusture response. Barring Mazagon Dock, four of the five recent debutants – Equitas Small Finance Bank, Likhitha Infra, UTI AMC and Angel Broking – were all listed at a discount to their issue prices.

The IPO of Hyderabad-based Gland Pharma, backed by Fosun Pharma, comprises a fresh issue of shares aggregating up to Rs 1,250 crore and offer for sale of up to 3.49 crore shares by existing shareholders.

However, not everything is hunky-dory about the issue. Having Chinese promoters on the board is one of major concern, said analysts.

Abhay Doshi, a Gujarat-based independent dealer of unlisted shares, said there is a negative sentiment towards China in the country. Also, the market volatility should not be neglected.

“However, injectibles produced by the company have seen tremendous growth in India and as well as globally,” he pointed out.

Kotak Mahindra Capital, Citigroup, Haitong Securities and Nomura Financial Advisory and Securities are the book running lead managers to the IPO.

The company posted Rs 2,772 crore revenue for the year ended on March 31, 2020 against Rs 2,129.7 crore reported for the previous year. In FY2019-20, it reported a Rs 772.8 crore profit against Rs 451.8 crore reported for the previous financial year.





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