 "Concord Biotech lists at 21% premium over its issue price")
At 10:20 AM, the stock traded at Rs 919, up 24 per cent when compared with its issue price on volume of around 5.50 lakh shares on the BSE. Meanwhile, the S&P BSE Sensex was down 0.4 per cent at 64,875.
Post listing, Anubhuti Mishra, equity research analyst at Swastika Investmart recommends investors can consider booking profti at the counter.
"Concord Biotech made its debut on the stock markets by going public at Rs 900 per share. Concord Biotech is a leading API company with a proven track record. The company manufactures and exports APIs for a wide range of therapeutic areas. However, the company's international operations expose it to various complex risks. Additionally, this industry has been facing margin pressure recently. Overall, the listing of Concord Biotech was in line with expectations. The company's strong fundamentals and good subscription levels were positive factors for this. Investors who participated in the IPO should consider booking profits post-listing.", Anubhuti Mishra said.
This Rekha Jhunjhunwala-backed IPO had received a good response from investors with the issue subscribed 24.87 times. The qualified institutional buyers (QIB) category was subscribed 67.67 times, while non-institutional investor’s category subscribed 16.99 times and retail category subscribed 3.78 times, data shows.
Concord Biotech expects that the listing of its equity shares to enhance its visibility and brand image as well as provide a open market for the equity shares in India.
The India-based biopharma company is among one of the leading global developers and manufacturers of select fermentation-based APIs across immunosuppressants and oncology in terms of market share, based on volume in 2022, supplying to over 70 countries including regulated markets, such as the United States, Europe and Japan, and India.
It commanded a market share of over 20 per cent by volume in 2022 across identified fermentation-based API products, including mupirocin, sirolimus, tacrolimus, mycophenolate sodium and cyclosporine.
Concord Biotech recorded 18 per cent CAGR in revenue over FY21-23 with robust EBITDA margin of 40 per cent. Its return ratios were healthy with RoE/RoCE of 20 per cent/19 per cent and it generated free cash flow over last two years with FCF/EBITDA at 29 per cent.
Analysts at Motilal Oswal Financial Services in IPO note said that they like Concord Biotech given its complex product portfolio, presence in niche space, strong client relationship and high entry barriers. The issue is valued at 32x P/E in line with peer group’s avg: ~32x. The brokerage firm believes the company could benefit from the industry tailwinds given its PLI approval in place.
Concord Biotech has an established presence in the therapeutic areas and is well poised to benefit from the industry growth tailwinds. The immunosuppressant API portfolio is expected to remain one of the key contributors to the API business in the near future. Moreover, the R&D team is working on developing new formulations for which they expect to apply for ANDA approvals from the USFDA, said analyst at Reliance Securities.