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concord biotech listing: Concord Biotech to list on Friday. Here’s what GMP suggests hot news

The shares of Concord Biotech, which received a decent response to the IPO, will debut on the exchanges on August 18. Ahead of the listing, the shares are fetching a premium of Rs 120 in the unlisted market.

If we consider the upper price band of Rs 741, the stock is expected to list at a premium of 16%.

However, it is important to note that grey market premiums are just an indicator as to how the company’s shares are stacked up in the unlisted market and are subject to change rapidly.

Analysts are of the opinion that a market premium of over 15% on the issue price is justified based on the company’s business model, which comprises many niche biopharma products.

“On valuations, the issue was fully priced in and investors remained cautious looking at 100% OFS wherein the company is not receiving any growth funds. Considering the subscription demand and market sentiments a decent listing gain around 15-18% can be assumed. Listing price would be in the range of Rs 850-870,” said Prashant Tapse of Mehta Equities.

Fermentation-based API major Concord Biotech saw 24.86 times subscription for its IPO at close. The qualified institutional buyer portion was booked the most at 67.67 times; non-institutional investors at 16.99 times, whereas, retail category was subscribed 3.78 times.

The company, with a marked presence across the fermentation value chain, supplies to over 70 countries including regulated markets, such as the US, Europe and Japan, and India.As of FY23, it had 23 APIs (89% of revenue), which it aims to increase further especially in anti-infective/oncology segments.

Concord recorded 18% CAGR in revenue over FY21-23 with EBITDA margin of 40%. Its return ratios are healthy with RoE/RoCE of 20% and 19%, respectively, and it generated free cash flow over the last two years with FCF/EBITDA at 29%.

Kotak Mahindra Capital, Jefferies India, Citigroup are the book running lead managers and Link Intime India is the registrar for the IPO.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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