Akums Drugs IPO subscription status: Amidst the Nity 50 poised to reach 25,000 levels in a bullish market, investors expressed great interest in Akums Drugs and Pharmaceuticals IPO, which was completely booked on its first day.
An hour after it opened, the retail section was completely subscribed. Beginning on July 30 and running through August 1, the issue's public subscription period is open to investors with a price band set in the range of ₹646 and ₹679 per share. Prior to the public subscription period for its share sale, the company said on Monday that it had raised ₹829 crore from anchor investors.
Akums Drugs and Pharmaceuticals IPO subscription status was 1.37 times. The retail investor portion garnered 3.35 times subscription, while the non-institutional investor portion received 1.96 times subscription. Of all buyers, 43% are qualified institutional buyers, or QIBs. 1.07 times subscription had been made to the employee portion.
75% of the issue size has been set aside by the firm for qualified institutional buyers, while 15% for non-institutional investors and 10% for retail investors. Investors can bid for a minimum of 22 equity shares and in multiples thereof.
Akums is a pharmaceutical contract development and manufacturing organisation (CDO) that was founded in 2004. It offers a broad range of pharmaceutical products and services both domestically in India and abroad.
Tarun Singh, MD of Highbrow Securities, points out that Akums Drugs and Pharmaceuticals, a well-known CDMO in India, has a strong track record, a large clientele, strong R&D resources, and a key position in the pharmaceutical value chain. For a number of reasons, prospective investors should proceed cautiously. The company's main goal with its IPO is to use acquisitions to finance its inorganic expansion. Nonetheless, the fact that more than 60% of the earnings are meant to serve as exit points for existing stakeholders suggests that short-term profits are prioritised above sustainable growth. The company's ability to enhance operations and encourage development appears limited, with just 35% of the IPO funds designated for reinvestment. This raises questions over the promoters' dedication and long-term vision.
The brokerage claims that international export activities and a robust domestic CDMO presence both contribute to Akums Drugs' prominence in the Indian pharmaceutical market. This gives it a competitive advantage in the sector and enables it to take advantage of expansion prospects in several areas.
The financial success of Akums Drugs and Pharmaceuticals is fueled by leveraging its leadership position in the CDMO market to increase market share and solidify position, scale API business, expand globally through strategic initiatives, concentrate on R&D, and have strong manufacturing capabilities—all of which have contributed to the company's robust growth.
“Excluding adjusted put call liabilities, the IPO is valued at a reasonable P/E of 29.7x. Therefore, we recommend a SUBSCRIBE rating for the issue,” the brokerage said.
Akums Drug IPO, which is worth ₹1,857 crore, comprises a fresh issue of ₹680 crore, and an offer-for-sale (OFS) of 17,330,435 equity shares by the promoters and other investors.
In the OFS, investors Ruby QC Investment Holdings Pte Ltd would be offloading 1.43 crore shares, while promoters Sanjeev and Sandeep Jain will each sell 15.12 lakh equity shares.
The net proceeds from the new issuance will be used to pay off the company's and its subsidiaries' (Pure and Cure Healthcare, Maxcure Nutravedics, and Pure) obligations. The proceeds from the IPO will also be used for inorganic growth projects and increased working capital needs.
The book running lead managers for the Akums Drugs and Pharmaceuticals IPO are ICICI Securities Ltd, Axis Bank Ltd, Citigroup Global Markets India Private Ltd, and Ambit Private Ltd. The registrar for the offering is Link Intime India Private Ltd.
Akums Drugs and Pharmaceuticals IPO GMP today or grey market premium is +177. This indicates Akums Drugs share price were trading at a premium of ₹177 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Akums Drugs share price was indicated at ₹856 apiece, which is 26.07% higher than the IPO price of ₹679.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
