Gland Pharma IPO: Issue subscribed 60 percent and QIB fully booked on final day

Gland Pharma made headlines on 9 November after making the largest IPO by a pharma company in India amounting to about Rs 6480 crore. This has been subscribed 60 percent so far on November 11, the final day of bidding for all kind of investors. The public issue has received bids for 1.75 crore equity shares against IPO size of over 3.02 crore equity shares, the data available on the exchanges showed. The public issue is constructed from a fresh issue of Rs 1,250 crore and an offer for sale of more than 3.48 crore shares by promoter Fosun Pharma and selling shareholders.

Qualified institutional investors has lend a good response on last day of the issue as their reserved portion is subscribed 1.73 times so far, while the portion set aside for retail investors has seen a  15.6 percent subscription and that of non-institutional investors is at 3.36 percent. The IPO size mentioned above does not include anchor book. The company raised a capital of Rs 1,944 crore from anchor investors on last Friday, at higher end of price band of Rs 1,490-1,500 per share.

Gland Pharma Ltd, the Hyderabad-based company is one of the fastest-growing generic injectable companies. It produces a wide diversified range of high-quality complex injectables. The company deals with products like sterile injectables, oncology, and ophthalmics, complex injectables (peptides, suspensions, hormonal products, long-acting injectables), NCE-1s, First-to-File products, etc. The company follows a B2B model to expand business across more than 60 countries including the US, Canada, Australia, India, Europe, etc. Leading pharma companies i.e. Sagent Pharmaceuticals, Apotex Inc. Athnex Pharmaceutical Division, LLC, Fresenius Kabi USA, LLC, etc. are some of its key customers. It has 7 operational manufacturing units in India comprising 4 finished formulations facilities, 22 production lines, and 3 APIs. It also has a professional management team and Shanghai Fosun Pharma renowned as a  global pharmaceutical major is one of its promoters. Its total revenue from operations has grown at a CAGR of 27.38 percent, EBITDA 36.90 percent and restated profit 55.15 percent from FY18 to FY20.

Gland Pharma’s IPO had received 22 percent bids by 10 november. Manali Bhatia of Rudra Shares recommends to subscribe the issue for long term as the company does not have any listed peers, and the business deals in injectables have high entry barriers which signifies conducive conditions to the presence of GPL. On the financial front too, it is sitting with good cash levels with negligible debt levels, a good CAGR growth rate in terms of Revenue & PAT and enjoys sound margins. However she also adds that the Indo-China tensions could possess an imminent threat to Gland Pharma’s business as company receives more than 30 percent of raw material from China, also its promoters are largely Chinese owned companies.

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