Concord Biotech IPO: Firm mobilises ₹465 crore from anchor investors

The anchor investor list includes the government of Singapore, Abu Dhabi Investment Authority, Government Pension Fund Global, Polar Capital Funds, HSBC Mutual Fund, WF Asian Reconnaissance Fund, The Prudential Assurance Company, among others.

Nippon Life, UTI Mutual Fund, DSP Mutual Fund, Franklin Mutual Fund, SBI Life Insurance, Motilal Oswal Mutual Fund, Edelweiss Trusteeship, Invesco India, Bandhan Mutual Fund, Aditya Birla Sun Life, Max Life Insurance and Tata AIA Life Insurance also participated via anchor book.

Out of the total allocation of 6,274,695 equity shares to the anchor investors, 2,474,835 equity shares were allocated to 10 domestic mutual funds through a total of 20 schemes amounting to ₹183.39 crore i.e. 39.44 per cent of the total anchor book size.

Concord Biotech IPO Details

Rekha Jhunjhunwala-backed Concord Biotech IPO consists of a pure offer-for-sale by Helix Investment Holdings Pte Ltd. of up to 20.93 million shares. The issue offer is priced at ₹1,550 crore on the upper band, and the firm is worth ₹7,752 crore. 20 per cent of the company is owned by Helix Investment Holdings Pte Ltd, which is backed by Quadria Capital Fund LP, an Asian private equity fund with a focus on healthcare.

Rakesh Jhunjhunwala owned 24.09 per cent of the company through his asset management company RARE Enterprises (via RARE Trusts), which is now in the name of Rekha Jhunjhunwala. In 2004, Rekha and Rakesh Jhunjhunwala made an investment in Concord Biotech.

Concord is 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.

The IPO lot size is 20 shares and the minimum investment amount required by investors is ₹14,820. The biopharma company plans to raise anywhere between ₹1,498- ₹1,551 crore from the IPO.

The book running lead manager for the issue are Kotak Mahindra Capital, Citigroup Global and Jefferies India. The finalisation of allotment is expected to take place on August 11, while refunds will be initiated on August 14. The shares will be credited to the demat accounts of eligible investors on August 17.

The offer is being made through the book building process, wherein not more than 50 per cent will be available for allocation to the qualified institutional buyers, not less than 15 per cent will be available for allocation to the non-institutional investors and not less than 35 per cent will be available for allocation to the retail individual bidders.

Brokerage View

Domestic brokerage firm has assigned a ‘subscribe’ rating on Concord Biotech IPO. Concord Biotech Ltd (CBL) has an established presence across therapeutic areas and is well-poised to benefit from the industry growth tailwinds, according to Motilal Oswal. 

‘’According to F&S Report, global oncology/immunosuppressant/ anti-infective API markets are expected to grow at CAGR of 14%/10%/3% over CY22-26. It has a portfolio of >200 customers spread over 70 countries as of FY23 which it plans to expand further along with increasing the wallet share with existing clients to tap this opportunity.” said the brokerage.

‘’We like CBL 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. We believe CBL could benefit from the industry tailwinds given its PLI approval in place. Hence we recommend subscribe,” added Motilal Oswal.

Updated: 03 Aug 2023, 10:42 PM IST