FOMO helps Gland Pharma swell on debut
- The shares of Gland Pharma listed at a premium of 12% over the issue price band.
- In minutes after its debut, the shares gained over 6% and were trading at ₹1795.30 a piece at 10:04 am.
- Gland Pharma's total market cap rose to ₹28,636.54 crore.
AdvertisementThe ₹6,480 crore initial public offering of the Chinese promoter Fosun Pharma-backed Gland Pharma made a lot of money for its IPO investors despite a subdued response during the public issue. Top brokerages had advised caution on Gland Pharma, given its China connection. However, investors could not resist its strong financial performance and the fear of missing out has helped the company record a stellar debut on Dalal Street.
The shares listed at a premium of 12% over the issue price band. And, in minutes after listing debut the shares gained over 6% and were trading at ₹1795.30 a piece at 10:04 am in a firm market.
This is the 13th company to list this year and the largest ever public issue in the Indian pharma industry.
Gland Pharma total market cap rose to ₹28,636.54 crore at 10:03 am. A total traded quantity of 1.39 lakh shares changed hands on BSE amounting to a turnover of ₹23.86 crore.
The company will trade with the symbol of ‘GLAND’ on the Indian stock exchanges.
Rising demand for Gland Pharma
So far this year, nearly every company that recorded a tepid response during their IPO saw a discounted listing. And, the IPO’s of UTI AMC, Likhitha Infrastructure and Angel Broking are proof of that.
However, the shares of Gland Pharma were piping hot in the grey market ahead of its listing, and the market premium suggested an upside of 7% a day before listing.
Given that the Chinese promoter backs it, top brokerages had advised caution, despite its strong financial background, growing industry and diversified portfolio. Choice research report for its IPO highlighted that anti-Chinese sentiment after the recent geopolitical tension in the Galwan valley may disrupt its business.
What worked for Gland Pharma?
Strong balance sheet
Gland Pharma has a successful track record of operating a B2B model with leading pharmaceutical companies such as Sagent Pharmaceuticals and Apotex as well as Fresenius Kabi USA and Athenex Pharmaceutical Division in the United States and the Rest of the world.
|2 sterile injectables facilities|
|1 Penems facility|
|1 oncology facility|
|3 API facilities|
Diversified business — spread over 60 countries
With its business spread over 60 countries, the company has a great track record of revenue delivery and profitability across the United States, Europe, Canada, Australia, India and the rest of the world, according to Axis Securities.
As of June 30, the company earns nearly 63% of its revenue from the US and nearly 15% from India — these two countries are the biggest market for Gland Pharma.The expansion in various other countries helps in offsetting the slowdown impact in a particular region or a country.
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