Glenmark Life Sciences listing: No bumper gains; shares debut at 4% premium to IPO price

Glenmark Life Sciences shares made a weak listing on the stock exchanges today, marred by the muted market momentum.

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To help the company evade any downside of share pledging, the report discusses how the board of directors of a firm must caution promoters from over pledging their shares. (Image: REUTERS)

Glenmark Life Sciences shares made a weak listing on the stock exchanges today, marred by the muted market momentum. Glenmark Life Sciences’ shares began trading at Rs 751 per share, up 4.32% from the IPO price of Rs 720 per share. The IPO of Glenmark Life Sciences had received a strong response from investors earlier last week. A subsidiary of the already listed Glenmark Pharmaceuticals, Glenmark Life Sciences develops and manufactures high value, non-commoditized APIs with a portfolio of 120 products. On listing the company was commanding a market capitalization of Rs 9,203 crore. 

Check live price: Glenmark Life Sciences

After the initial few minutes of trade, Glenmark Life Sciences share price extending its opening gains to jump 9% from the IPO price to trade at Rs 783.75 per share.

Glenmark Life Sciences IPO was subscribed 44.17 times by investors. Retail investors had bid for 14.63 times their portion while Non-Institutional Investors (NII) had bid for a whopping 122.54 times their quota. Qualified Institutional Buyers (QIB) subscriptions stood at 36.97 times. QIBs had half of the issue reserved for them while 35% was kept for retail investors and 15% for NIIs. Glenmark Life Sciences’ IPO was a mix of a fresh issue of equity shares and an offer for sale (OFS).

“Considering the FY-21 adjusted EPS of Rs 28.69 on a post-issue basis, the upper price band implies a P/E of 25.09 with a market cap of Rs 88,220 mn, while its peers namely Divi’s Laboratories, Laurus Labs and Shilpa Medicare are trading at a P/E of 64.0, 36.1 and 36.5 respectively,” said analysts at Marwadi Financial Services. The brokerage firm had a ‘Subscribe’ rating to the IPO.

Analysts at Hem Securities had recommended investors to subscribe to the IPO for both listing as well as long-term gains. “Company is bringing the issue at price band of Rs 695-720 per share at p/e multiple of 25 on post issue FY21 eps. The company having leadership in select high value, non-commoditized APIs in chronic therapeutic areas enjoys strong relationships with leading global generic companies,” Hem Securities said in a note. 

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