A super hit IPO from 2020 has finally doubled investors' money
- Gland Pharma, which debuted on the share market last year, has doubled its share price in a little over 6 months.
- The IPO priced at ₹1,500 was subscribed twice over and the stock listed at a 20% premium to the issue price.
- In the last three months alone, the company’s shares have surged by over 44%.
Investors who stuck with Gland Pharma despite the ₹6,480 crore initial public offer (IPO) receiving a tepid response have reason to celebrate – their initial investment has doubled in a span of a little over 6 months.
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Shares of the pharma company rallied on May 18, surging by nearly 8%. The Gland Pharma share price was hovering around ₹3,011 at 11:00 am, more than ₹200 up from its previous closing price of ₹2,793.
Gland Pharma was listed on the stock exchanges on November 20, 2020. Compared to the issue price of ₹1,500, this is a 100% gain till date.
Nearly half of the surge in Gland Pharma’s shares has come after the slump on February 1 – since then, the share price has increased by over 44% till date.
May alone has contributed to a 14% increase in the share price of the company, in the run up to its March 2021 quarter results.
As a result of this rally, Gland Pharma’s total market capitalisation has crossed ₹45,000 crore.
And there could be a further rally. “Gland Pharma reported a good set of numbers in Q4FY21, with good revenue growth in export as well as domestic market,” said a report by Angel Broking, adding that the company is capitalising on the demand for COVID-19 related products.
A report by Kotak Institutional Equities Research highlighted the positives that outline Gland Pharma’s growth prospects.
“Gland Pharma ended FY2021 on a strong note with new launches and expansion into other geographies driving robust revenue growth. A strong pipeline of products, healthy filing rate, entry into new markets, potential for increasing market share in recently launched products along with higher traction in Covid-related products provide solid medium-term growth visibility,” the report said.
“Our ability to respond to changing market demands during COVID-19 was visible bearing the registered growth in markets of the U.S, Europe, Canada and Australia and back of new launches and volume growth in existing portfolio, supported by our increased capacity,” said Srinivas Sadu, chief executive at Gland Pharma.
However, there are some concerns that could impact the company’s performance, so there could be wisdom in being cautious.
“The company’s profitability and growth are very reasonable. It has 45-50% of its revenue coming from a few large clients, and that does present some kind of concentration risk. But just the breadth of the business allows the company to continue to do well,” Chakri Lokapriya, managing director at TCG Asset Management, told Economic Times after Gland Pharma’s IPO last year.
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