Concord Biotech IPO: Should You Invest In Rakesh Jhunjhunwala-Backed IPO? Here’s What Experts Say

The initial public offering (IPO) of Jhunjhunwala-backed Concord Biotech opened for subscription today, August 4, and will remain open until August 8. The public issue, which aims to raise Rs 1,551 crore, has been subscribed over 0.27 times, as of 1:24 pm on Friday.

As per NSE data, the retail institutional investors were subscribed by 38% or 0.38 times, while Non-institutional investors were subscribed by 35% or 0.35 times.

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The bio-pharma company has fixed Concord Biotech IPO price band at ₹705 to ₹741 per equity share. According to market observers, Concord Biotech share price has started to trade in the unlisted market, available at a premium of ₹150 per equity share in the grey market (GMP) today.

Out of the total IPO size, 50% of the net offer is reserved for qualified institutional buyers, while a minimum of 15% is set for non-institutional investors. At least 35% is to be allotted to retail individual investors. The business has also set aside up to 10,000 equity shares under the IPO for subscription by eligible employees, with a discount of Rs 70 per equity share being offered to them. It has collected Rs 465 crore from anchor investors ahead of the IPO.

Analysts take on it

Most brokerage firms are positive on the issue and have suggested ‘subscribe’. Analysts have cited strong business models, global presence and in-line valuations, as major key driving factors.

“At the higher price band, CBL is demanding a P/E multiple of 32.3x (to its FY23 earning), which is at discount to the peer average. Growth in the global market of fermentation-based APIs is expected to be driven by immunology, oncology and anti-infective therapeutic areas. CBL is focusing on these therapeutic areas with its wide range of niche & complex APIs. Moreover, considering its manufacturing capabilities and geographic presence CBL is well placed to benefit from the expansion in the market. Thus, we assign a “SUBSCRIBE" rating for the issue," said Choice Broking report.

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Reliance Securities has also given ‘Subscribe’ tag to the IPO. "In view of strong global footprint, diversified products portfolio, robust in-house R&D capabilities and experienced management team, we recommend a SUBSCRIBE to the issue,” Reliance Securities said in its report.

For the year ended on March 31, 2023, Concord Biotech had reported a net profit of Rs 240.08 crore with a revenue of Rs 888.48 crore. The company had reported a net profit at Rs 174.93 crore, with a revenue from operations at Rs 736.35 crore in the year-long period.