Gland Pharma made a strong debut on the bourses on Friday. The stock got listed at Rs 1,701 — a 13.4 per cent premium to its issue price — and ended the session at Rs 1,820, up 21 per cent over its issue price. The post-listing market capitalisation for the company stands at Rs 29,848 crore, helping it break into the top 10 valuable pharma firms in the country.
The Rs 6,480-crore IPO was one of the biggest by a pharma company in the domestic market. The price band was set at Rs 1,490-1,500 per share. The IPO comprised a fresh issue of Rs 1,250 crore and an offer for sale of Rs 5,230 crore. The firm plans to use the proceeds to fund working capital requirements.
The Fosun-promoted firm’s IPO had managed to sail through on the back of institutional investor support, even as retail and high networth individual (HNI) investors shunned the issue. The institutional investor portion of the IPO was subscribed 6.4x, while the HNI portion was subscribed just 0.5x and retail investor portion 0.23x. Overall subscription stood at 2.06x.
Analysts had recommended Gland Pharma, citing its attractive valuation, healthy growth rate, and margins.
Yet, the IPO struggled to get through due to concerns — especially among HNI investors — over the grey market premium (GMP). Ahead of its listing, the GMP had soared. Analysts had cited this sudden turnaround in GMP for stressing the fact that investors should consider the fundamentals and pricing of the issue, instead of demand in the grey market, while investing in an IPO.