Shares of Akums Drugs and Pharmaceuticals will be listed at the bourses on Tuesday. The company has fixed the IPO price at ₹679, at the upper end of the price band ₹646-679. Analysts expect a decent listing gains of about 1-015 per cent.
Earlier, The initial public offering of Akums Drugs and Pharmaceuticals saw a robust response from all category investors, especially from institutions. The IPO that opened last Tuesday and closed on Thursday was subscribed 63.56 times, overall.
The ₹1,856.74-crore IPO was a mix of fresh issue worth ₹680 crore and an offer-for-sale of ₹1,176.74 crore by the existing shareholders. While retail investors portion was subscribed 21.30 times, HNIs window received bid for 42.21 times; however and that of employees 4.27 times. The QIB was subscribed 90 times, as most institutions bid on the last day
A discount of ₹64 a share was offered to eligible employees.
Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said: “Despite pressure in the market, we believe Akums Drugs can list with a decent debuting gains in the range of 10-15 per cent on the issue price. Considering healthy subscription demand especially from QIB (90x) and unique business matrix, we continue to believe and hold our long term positive outlook in the India’s largest CDMO player by revenue, production capacity and client base. We think the company’s comprehensive product offerings and extensive manufacturing capabilities, along with its strategic presence across the pharmaceutical value chain, provide a solid foundation for sustained growth.
Anchor investors
Akums Drugs and Pharmaceuticals had raised ₹828.8 crore from several anchor investors as part of the IPO. Prominent global investors such as Blackrock, Smallcap World Fund, Abu Dhabi Investment Authority, HSBC Global, Florida Retirement System, Carmignac Portfolio and Neuberger Berman Emerging Markets Equity Fund bought 33.5 lakh equity shares worth ₹227.5 crore in the anchor window.
Domestic MFs and institutions such as SBI Mutual Fund, International Growth Fund and Income Fund, Aditya Birla Sun Life Trustee, Franklin India, Templeton India, DSP India Fund, IIFL Asset Management, Tata Mutual Fund, Motilal Oswal Mutual Fund, Bandhan Mutual Fund, Edelweiss Trusteeship, PGIM India and JM Financial Mutual Fund also participated in the anchor book.
The company proposes to utilise net proceeds from the fresh issue towards repayment/prepayment of indebtedness of the company; repayment/prepayment of indebtedness of its subsidiaries namely, Maxcure Nutravedics Ltd and Pure and Cure Healthcare Pvt Ltd; funding incremental working capital requirements of the company; pursuing inorganic growth initiatives through acquisitions; and general corporate purposes.
“On a valuation parse at the upper band Rs.679/-, the issue was asking for a Market Cap of Rs.10687 Cr. Given the anticipated growth in the Indian CDMO market, along with Akums expanding global footprint and strategic move into API manufacturing, further enhance its long-term prospects. Hence, we recommend allotted investors to “HOLD” Akums Drugs and Pharmaceuticals ltd IPO for a long term perspective. Post listing, we believe the market can give Akums a premium multiple towards its leadership position which may result in delivering healthy post listing gains on its issue price,” said Tapse.