Soon after its IPO, Innova Captab gained traction and rose to Rs 502, a 12% increase over its issue price on the BSE.
Innova Captab made a subdued start on the BSE on Friday, with its shares trading barely 2% higher at Rs 456 versus the issue price of Rs 448. The pharmaceutical company‘s shares rose 1% to Rs 452 on the National shares Exchange (NSE).
However, immediately after its listing, Innova Captab gained traction and rose to Rs 502, up 12% from its BSE issue price. In intraday trade, it fell to Rs 452. On the NSE and BSE, around 7.3 million equity shares were traded.
The integrated pharmaceutical business Innova Captab’s first public offering was subscribed to 55.26 times. The category for Qualified Institutional Buyers (QIBs) was subscribed to 116.73 times. Non-Institutional Investors (NII) were subscribed to 64.95 times, while Retail Individual Investors (RIIs) were subscribed to 17.75 times.
Innova Captab is a fully integrated pharmaceutical firm with operations throughout the pharmaceutical value chain, including R&D, production, medication distribution, marketing, and exports.
Commercial large-scale manufacture of generic pharmaceuticals in numerous product forms such as oral solids, oral liquids, dry syrups, and injectable, as well as more complicated delivery forms such as sustained release and tablets in capsules, are among the company’s services and products. The firm also has goods that use cutting-edge technology, such as Nanotechnology.
According to CRISIL, it is the third largest contract development and manufacturing (CDMO) participant in terms of revenue generated and net profit margin created in FY22. Its CDMO services are used by 14 of the top 15 Indian pharmaceutical firms. Its branded generics business is also expanding rapidly in response to rising demand for branded generics goods in India and other markets, as well as additional capacity.
In Q1FY24, the firm purchased 100% of Sharon Bio – Medicine through the corporate insolvency resolution procedure (CIRP) under the Insolvency and Bankruptcy Code (IBC) for Rs 195.4 crore.
The acquired firm manufactures API, intermediates, and finished doses, as well as CDMO services, and it mostly exports, accounting for 75.3 percent of sales in FY23. The transaction was completed for 12.5x Sharon’s EBITDA for FY23, which appears to be fairly pricey. However, considering the probable synergies, analysts at KRChoksey Shares predicted increased revenue and profitability in their IPO report.
CDMO segment growth of 14-16% is predicted to be driven by high demand from large pharmaceutical businesses, including both Indian and international and worldwide companies, for outsourcing of new product development and production.
According to analysts at Reliance Securities, the increased expansion over the next two years anticipates an increase in demand and leveraging customer relationships for domestic branded generics; international generics growth in Sharon Bio Medicine and taxation benefits from the new plant will boost earnings over the next few years.
