Concord Biotech, a prominent global manufacturer of fermentation-based APIs, is set to open its initial public offering (IPO) for public subscription on August 4, closing on August 8. Investors are already showing strong interest in the company, as its shares are commanding a premium of Rs 325 in the unlisted market.
The company holds a significant market share of over 20% by volume in 2022 for select fermentation-based APIs, particularly in the immunosuppressants and oncology segments. It supplies its products to more than 70 countries, including regulated markets like the US, Europe, Japan, and India, making it a key player in the fermentation value chain.
In FY23, Concord Biotech reported 23 APIs (accounting for 89% of revenue), with plans to expand further, especially in the anti-infective and oncology segments. The IPO is a complete offer for sale (OFS) of 2.09 crore equity shares, totaling up to Rs 1,551 crore, without any fresh equity issue.
The OFS is being conducted by Helix Investment Holdings, backed by private equity firm Quadria Capital. The IPO price band is set at Rs 705-741 per unit, and investors can bid for a minimum of 20 shares and in multiples thereafter.
The offer reserves 50% for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and the remaining 35% for retail investors. It's important to note that Concord Biotech will not receive any proceeds from the offer, as the entire sum will go to the selling shareholder.
Financially, the company has demonstrated a robust performance with an 18% CAGR in revenue over FY21-23, an EBITDA margin of 40%, and healthy return ratios with RoE/RoCE of 20% and 19%. Additionally, it generated free cash flow over the last two years, with FCF/EBITDA at 29%.
The book running lead managers of the IPO are Kotak Mahindra Capital, Jefferies India, and Citigroup. And, Link Intime India serving as the registrar for the IPO.
With strong investor interest evident in the unlisted market, Concord Biotech's IPO is likely to be closely watched as it opens for public subscription. Investors are keeping a keen eye on this opportunity to invest in a leading player in the global fermentation-based APIs market.