Backed by China’s Fosun Pharma, the firm met with a lacklustre response during the subscription period with only Qualified Institutional Buyers oversubscribing their portion.
The firm follows a vertical integration pattern which has helped it grow market share in key markets such as Europe, Canada and Australia, and the United States.
Gland Pharma shares made stock market debut at Rs 1,701 per share, up Rs 201 or 13.4% from the IPO issue price. At the end of the Friday’s trading session the debutant stock was up 21% from its issue price and 7% from its opening price to close at Rs 1,820 per share. Gland Pharma’s initial public offering (IPO) was the largest ever public issue by a pharmaceutical firm in India. Backed by China’s Fosun Pharma, the firm met with a lacklustre response during the subscription period with only Qualified Institutional Buyers (QIB) oversubscribing their portion while retail investors and Non-Institutional Investors (NII) stayed away.
At the higher price band of Rs 1,500 per share, Gland Pharma’s share is valued at a TTM P/E multiple of 31.7x, which is in-line with pharma industry P/E of 32.3x, according to brokerage firm Choice Broking. The firm follows a vertical integration pattern which has helped it grow market share in key markets such as the United States, Europe, Canada and Australia, and the United States. Majority of its revenue comes from exports rather than the domestic market.
In the United States, Gland Pharma was the fastest growing generic injectables-focused company by revenue from 2014 to 2019. Its primary focus is on the B2B business model. Various analysts, ahead of the IPO, lauded Gland Pharma’s extensive and vertically integrated injectables manufacturing capabilities. Its excellent regulatory record has also been noticed. “GPL’s manufacturing facilities have established a consistent record of regulatory compliance with the USFDA highlighting its focus on quality assurance and quality control,” said HDFC Securities.
Based out of Hyderabad, Gland Pharma was established in 1978 and is one of the largest and fastest growing injectable-focused B2B companies, with a global footprint. In 2017, China’s Fosun Pharma acquired a 74% stake in the firm for $1.09 billion. “With benefits of being an out and out integrated injectable/ophthal manufacturer and B2B functionary combined, Gland offers a compelling proposition with its unblemished regulatory track record and customer stickiness besides long-standing manufacturing pedigree, justifying premium valuation,” said ICICI Direct in an IPO note.