Mumbai: The ₹6,480-crore IPO of Gland Pharma was subscribed 4.5% on the first day of bidding on Monday.
It will be the first company with a Chinese promoter to be listed on the Indian exchanges. Fosun had acquired a 74% stake in Gland Pharma in 2017 for over $1.1 billion. It was the largest acquisition of an Indian company by a Chinese firm.
The public issue received bids for 1.269 million equity shares out of the over 30.2 million shares on offer, data available with the exchanges showed. It will be the only listed player in the pure formulations space in India.
While qualified institutional buyers did not bid on Monday, non-institutional investors subscribed 1% and retail investors subscribed 8%.
The public issue comprises a fresh issue of ₹1,250 crore and an offer for sale of over 34.8 million equity shares by promoters and selling shareholders. The price band for the issue was fixed at ₹1,490-1,500 per share.
“The offer is priced at a price to equity of around 18.52 times on annualized EPS of the quarter ended June. Gland Pharma is one of the biggest pharma IPOs. The company has a focus on complex injectables which has high entry barriers and strategic partnerships to penetrate new markets like China, which can prove to be a lucrative opportunity for the company,” GEPL Capital said.
Gland Pharma sells its products primarily using the business to business (B2B) model in over 60 countries as of June, including the US, Australia, Canada and India.
Nirmal Bang analysts said: “The issue price commands a price to equity of 31.7 times FY20 and 19.5x Q1FY21 annualized earnings at the upper price of band of ₹1,490-1,500. However, going forward the higher revenue growth, improving profitability would make it a better choice among peers. The brokerage recommends subscribe to the issue for long-term gains.”
Kotak Mahindra Capital, Citigroup Global Markets India, Haitong Securities India and Nomura Financial Advisory and Securities (India) are the book running lead managers to the IPO.