- Date : 04/08/2023
- Read: 3 mins
Concord Biotech IPO opens: Will this Big Bull-backed pharma player create magic? Read the completer article for in-depth analysis of the company.
Prepare to witness the birth of a potential game-changer as Concord Biotech, the pharma player backed by the legendary Rakesh Jhunjhunwala's investment firm RARE Trusts, sets the stage for its highly anticipated IPO. With the rising optimism around pharmaceutical stocks, this launch on Dalal Street has captured the attention of investors far and wide. The long-term investors may particularly find solace in subscribing to this IPO. This article delves into the intriguing world of Concord Biotech and explores whether this Big Bull-backed player can truly create magic.
- High market share in API segment
- Profit +37.2%, EBITDA +27.3%
- Attractive pricing, grey market premium
- Diverse portfolio, global footprint
The Concord Biotech IPO presents a lucrative chance for investors seeking to capitalise on the biopharma sector's growth prospects. With a robust market position, product range, financial performance, and Rakesh Jhunjhunwala's support, the company's attractiveness is heightened by an appealing pricing and substantial grey market premium. Yet, investors must exercise caution and be mindful of potential risks, including regulatory uncertainties, competitive pressures, and currency fluctuations.
Factors to evaluate before investing
- Company produces fermentation-based APIs for immunosuppressants and oncology, with high market share
- Company has a diverse portfolio, strong global footprint, presence in over 70 countries
- Company recorded 37.2 per cent on-year increase in net profit in FY23, driven by topline and operating metrics growth
- EBITDA of the company grew 25.6 per cent to Rs 343.3 crore in FY23.
- Operating profit margin expanded by 190 basis points to 40.2 per cent.
- Tailwinds in the API segment attract investors for growth prospects.
- Company’s IPO is priced at a P/E of 32.3 times, which is higher than its peers. However, the company's return on equity is also better than its rivals.
- Company's return on equity (RoE) improved from 16.64% in FY22 to 26.55% in FY23.
- Company's return on capital employed (RoCE) improved from 20.55% in FY22 to 28.54% in FY23.
Growth prospects of the company
Concord Biotech's higher P/E valuations are justifiable because the company has a strong product mix in the oncology segment, which is expected to grow strongly in the coming time. Concord also has a strong API pipeline, which supports its growth prospects.
Key features of the IPO
- IPO opens on Aug 4, closes on Aug 8
- Price band: ₹705-741 per share
- Lot size: 20 shares, multiples of 20
- IPO allocation: 50% QIB, 15% NII, 35% RI
- Allotment finalised on Aug 11, refunds on Aug 14, shares credited on Aug 17
Disclaimer: This article is intended for general information purposes only and should not be construed as investment or tax advice.
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