6500 Crore Bumper IPO is Opening today, should you invest Money. Gland Pharma opens for IPO today: Gland Pharma’s Rs 6500 crore Initial Public Offer (IPO) is opening for subscription on Monday, November 9. It is the largest IPO brought by any pharma company in India. Prior to this IPO, Gland Pharma has raised Rs 1,944 crore through anchor investors such as Singapore Government, Nomura, Goldman Sachs, Morgan Stanley, SBI Mutual Fund and Axis Mutual Fund. The company has raised these money at the rate of Rs 1,500 per equity share. This IPO can be subscribed till Wednesday i.e. November 11. If you too are thinking of putting money in it, then first know important things.
What should be invested?
Nirali Shah, Senior Research Analyst, SAMCO Securities, has advised for a long-term investment in Gland Pharma’s IPO. He says that many factors are working for Shanghai Co. Fossan-backed company Gland Pharma. First of all, it is the only Indian company listed in the pure formulation space. Secondly, the company follows the B2B model. The company sells its products in more than 60 countries and has a long-term contract with its best partners. Its top 5 clients contribute 40 per cent of the total revenue. The company is also in a strong financial position. The company has an expansion plan in the future. The company will use the funds from the IPO for working capital requirements. Cashbook is also better.
IPO price band
The company has fixed a price of Rs 1490-1500 per share for this IPO. Under this IPO, shares worth Rs 1,250 crore (80 lakh shares) will be issued. At the same time, 3.48 crore shares will be offered through the offer of sale. That is, an offer for sale (OFS) of Rs 4,750 crore will be kept. The funds raised from this IPO will be used for working capital, capital expenditure and general expenses related to the company.
At least how much investment is necessary
The company has prepared a lot of 15 shares. This means that any investor must buy at least 15 shares. In this IPO, 35 percent shares have been reserved for retail category.
Largest IPO of pharmaceutical company
The Rs 6,500 crore IPO of Gland Pharma is the largest IPO brought by any pharmaceutical company. Earlier, Aris Lifesciences raised Rs 1,741 crore from its IPO in 2017. Alchem Laboratories raised Rs 1350 crore in 2015 and Laurus Labs in 2016. So far, only 14 Indian companies have raised more than Rs 6,000 crore through IPOs.
China’s promoter company
Gland Pharma is originally promoted by Fosan Singapore and Shanghai Fosan Pharma. In the offer for sale, 1.93 crore shares will be sold by the promoter of the company Fosan Pharma, while one crore shares will be sold by Gland Cells Bio Chemical. Empower will sell 35.73 lakh shares while Nilaya Company will sell 18.74 lakh shares. Chinese company Fosan Pharma holds 74 percent stake in the company. Other investors of the company include Gland Cells (12.97 per cent), Empower (5.08 per cent) and Nilay (2.42 per cent).
Gland Pharma makes injectable drugs. The company sells its products in 60 countries including India, USA, UK, Australia and Canada. The company has a total of 1427 products and the company has submitted a new drugs application filing of 267 drugs with the USFDA. Of this, 215 have been approved.
Financial position of the company
Gland Pharma achieved a revenue of Rs 2,772 crore during the last financial year as compared to Rs 2,129.7 crore in the previous financial year. The company’s profit in the financial year 2019-20 was Rs 772.8 crore as compared to Rs 451.8 crore in the previous financial year.