Glenmark Life Sciences IPO subscribed 12.19 times so far; check grey market premium here

Glenmark Life Sciences initial public offering (IPO) has so far been subscribed 12.19 times, receiving a strong response from investors.

Glenmark Life Sciences IPO
Glenmark Life Sciences IPO has been heavily oversubscribed by all pockets of investors.

Glenmark Life Sciences IPO (initial public offering) entered the final day of bidding today with strong response to the issue since the first day. So far on the final day of sale, Glenmark Life Sciences IPO has been subscribed 12.91 times, with all pockets of investors oversubscribing their quotas heavily. The issue was oversubscribed within two hours of opening on Tuesday. Glenmark Life Sciences, a subsidiary of the already listed Glenmark Pharmaceuticals, is a developer and manufacturer of high value, non-commoditized APIs in chronic therapeutic areas with a strong partnership with global players. The Rs 1,541 crore public issue is a mix of fresh issue of equity shares and an offer for sale (OFS) by existing shareholders. Glenmark Life Sciences shares were trading at a moderate premium in the grey market.

Also Read: Glenmark Life Sciences IPO last day today: Should you subscribe? Grey market premium moderate, strong response

So far, retail investors have subscribed to the issue 11.84 times. Retail investor interest has been strong for the public issue since day one. Non-institutional investors have subscribed to the issue a whopping 25.25 times. Meanwhile, Qualified Institutional Buyers (QIB) have bid for 2.87 times the reserved portion. 50% of the IPO is reserved for QIBs while 35% is for retail investors and the remaining 15% is for NIIs. Overall the issue has been subscribed 12.19 times with investors bidding for 18.30 crore equity shares from the 1.5 crore on offer.

Grey market premium rebounds

In the unlisted space, Glenmark Life Sciences was trading at a premium of Rs 150 per share. “The movement has been weak. On Tuesday, it opened at around Rs 300 per share but then slipped later,” Sandip Ginodia, CEO, Abhishek Securities told Financial Express Online. Prior to the issue, Glenmark Life Sciences was trading at a premium of Rs 135 per share in the grey market.

Should you subscribe?

The company will get Rs 1,060 from the issue while the rest will go to the selling shareholders as part of the OFS. Glenmark plans to pay off business purchase considerations. “This will eradicate the interest obligations of the company and PAT margins will exceed further,” said Kaushlendra Singh Sengar Founder & CEO at INVEST19. “Backed by strong promoters and received 38 inspections and audits by global regulators, Glenmark Life Sciences IPO deserves ‘Subscription’. As a subsidiary of Glenmark pharmaceuticals, the learning curve of the company is high in maintaining its manufacturing facilities,” he added.

Glenmark Life Sciences has a strong regulatory record, having not received any warning letters/import alerts from regulatory authorities. On the upper end of the price band, analysts at ICICI Direct say the issue is priced at FY21 EV/EBITDA of 14.7x. ICICI Direct has a subscribe rating on the stock.

Glenmark Life Sciences has reported robust growth in topline over the last three years, given strong growth in demand for select high-value APIs, INDmoney said in a report. The company’s bottom-line has also expanded at a very healthy run rate of over 34% over this period. “At the higher end of the price band, Glenmark Life Sciences is reasonably priced at a P/E ratio of 25.09 times FY21 EPS (on a fully diluted on post-issue basis). This is lower as compared to peers such as Divi’s lab (64 times), Laurus Labs (37 times) and Shilpa Medicare (33 times). Glenmark Life has also reported higher return ratios than these companies.,” INDmoney said while adding that they are positive on the prospects of this issue.

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