Concord Biotechs’ entry, into the stock market has impressed investors by commanding a 21% premium over the offering (IPO) price. This indicates an interest from investors. The biotech company, supported by names like Rare Enterprises and Quadria Capital Fund specializes in fermentation-based Active Pharmaceutical Ingredients (APIs). They have their sights set on expanding in the infectious and oncology sectors. Kotak Mahindra Capital, Jefferies India, and Citigroup were instrumental, in leading their IPO.
Concord Biotech, a prominent biotechnology company specializing in fermentation-based APIs within the fields of immunosuppressants and oncology, recently marked its debut on the stock exchanges with an impressive 21% premium over the initial IPO price of Rs 741. This promising start was witnessed on both the NSE and BSE, where the shares entered the market at Rs 900 each, signifying a substantial premium of Rs 159 compared to the issuance price. Anticipating this listing, the company’s shares had already garnered a premium of Rs 120 within the unlisted market.
Noteworthy backers support Concord Biotech, including Rare Enterprises led by Rakesh Jhunjhunwala and the esteemed Quadria Capital Fund, both of which underline its significance as a player in the biotech industry.
Operating extensively across the fermentation value chain, Concord Biotech has a global footprint, serving over 70 countries, including highly regulated markets such as the US, Europe, Japan, and India. Its impressive portfolio currently encompasses 23 APIs, with a substantial 89% contribution to its revenue. The company is resolute in its ambition to further expand this portfolio, particularly within the anti-infective/oncology sectors.
The Initial Public Offering (IPO) attracted significant attention, with a remarkable subscription rate of 24.86 times at closing. Among the investor categories, qualified institutional buyers dominated the subscription with a staggering 67.67 times, while non-institutional investors subscribed 16.99 times, and the retail segment displayed healthy interest at 3.78 times.
While analysts acknowledged the IPO as appropriately valued, investor caution was palpable due to the lack of growth funds in the secondary issue. It’s important to note that the entire proceeds from the offering are allocated to the selling shareholder.
Concord Biotech’s financial performance is impressive, boasting an 18% Compound Annual Growth Rate (CAGR) in revenue between FY21 and FY23, along with a commendable EBITDA margin of 40%. The company maintains robust return ratios, evidenced by RoE/RoCE figures of 20% and 19% respectively. Over the past two years, the company has generated free cash flow, with FCF/EBITDA standing at 29%. In the fiscal year ending March 2023, Concord Biotech recorded revenues totaling Rs 888 crore, while its profits for the same period reached Rs 240 crore.
The company’s IPO was managed by Kotak Mahindra Capital, Jefferies India, and Citigroup, who acted as the book-running lead managers. Link Intime India served as the registrar for this noteworthy IPO event.
