Concord Biotech IPO subscribed 24.86 times at close

Concord Biotech IPO worth ₹1,551 crore, consisted entirely of an offer for sale. There was no fresh issue component in the IPO. The offer for sale (OFS) comprised of 2,09,25,652 (2.09 crore shares approximately). The IPO pricing was done in the band of ₹705 to ₹741 with the final price to be discovered through the process of book building. While the QIB portion only picked up traction on the last day, the retail portion and the HNI / NII portion got fully subscribed on the first two days of the IPO itself. The overall IPO had not been fully subscribed on the first day of the IPO but got fully subscribed by the close of second day.

Quick update on the overall Concord Biotech IPO response

Concord Biotech IPO saw fairly steady response on Day-1 and Day-2 of the IPO and closed with rather healthy subscription numbers at the close of Day-3. In fact, the company got fully subscribed only on the second day of the IPO. As per the combined bid details put out by the BSE at the close of Day-3, Concord Biotech Ltd IPO was subscribed 24.86X overall, with best demand coming from the QIB segment, followed by the HNI / NII segment and the retail segment in that order. In fact, the institutional segment saw some very good traction on the last day. The HNI portion did do well and a lot of the surge of funding applications and corporate applications did come in on the last day of the IPO. Retail portion got fully subscribed on Day-2 and built up heft gradually. Firstly, let us look at the details of overall allocation.

As of close of 08th August 2023, out of the 146.51 lakh shares on offer in the IPO, Concord Biotech Ltd saw bids for 3,642.83 lakh shares. This implies an overall subscription of 24.86 times overall. The granular break-up of subscriptions was in favour of the QIB investors followed by the HNI / NII investors while the retail portion got the lowest subscription among the various categories. QIB bids and NII bids typically gather most of the momentum on the last day, and that was the case in this issue also in the case of QIB bids. Both the QIB and the NII bids picked momentum on the last day and added to its heft of the previous days. Here are the details of the category-wise subscription.

Concord Biotech IPO  Subscription status of QIB Portion

Let us first talk about the pre-IPO anchor placement. On 03rd August 2023, Concord Biotech Ltd did an anchor placement with 30% of the IPO size getting absorbed by the anchors. Out of the 2,09,25,652 shares on offer, the anchors picked up 62,74,695 shares accounting for 30% of the total IPO size. The anchor placement reporting was made to the BSE late on 03rd August 2023. The IPO of Concord Biotech Ltd opened on 04th August 2023 in the price band of ₹705 to ₹741 and closed for subscription on 08th August 2023 (both days inclusive). The entire anchor allocation was made at the upper price band of ₹741. Here are the details of the anchor allocation with the principal subscriber names and quantity absorbed for those with the highest allocation. It is just a cross section.

Data Source: BSE Filings

The QIB portion (net of anchor allocation as explained above) had a quota of 41.83 lakh shares of which it has got bids for 2,830.65 lakh shares at the close of Day-3, implying a subscription ratio of 67.67X for QIBs at the close of Day-3. QIB bids typically get bunched on the last day and while the heavy demand for the anchor placement had given an indication of the institutional appetite for the Concord Biotech Ltd IPO subscription overall, the actual demand did turn to be quite robust for the IPO.

Concord Biotech IPO Subscription status of HNI / NII Portion

The HNI portion got subscribed 16.99X (getting applications for 533.04 lakh shares against the quota of 31.37 lakh shares). That is a very strong response at the close of Day-3 largely because this segment normally sees the maximum response bunched on the last day. Bulk of the funded applications and corporate applications, come in on the last day of the IPO, and that was visible as the overall HNI / NII portion added to its heft on the last day of the IPO. Apart from the QIB portion, even HNIs saw good traction on the last day.

Now the NII/HNI portion is reported in two parts viz. bids below ₹10 lakhs (S-HNI) and bids above ₹10 lakhs (B-HNI). The bids above the ₹10 lakh category (B-HNIs) typically represents most of the major funding customers. If you break up the HNI portion, the above ₹10 lakh bid category got subscribed 19.30X while the below ₹10 lakh bid category (S-HNIs) got subscribed 12.37X. This is just for information and is already part of the overall HNI bids explained in the previous para.

Concord Biotech IPO Subscription status of Retail Individuals

The retail portion was subscribed just 3.78X at the close of Day-3, showing steady to strong retail appetite. It must be noted that retail allocation is 35% in this IPO. For retail investors; out of the 73.20 lakh shares on offer, valid bids were received for 276.74 lakh shares, which included bids for 222.69 lakh shares at the cut-off price. The IPO is priced in the band of (₹705 to ₹741) and has closed for subscription as of the close of Tuesday, 08th August 2023.

Read about Concord Biotech IPO

Brief on the business model of Concord Biotech Ltd

Concord Biotech Ltd, a company backed by the late Rakesh Jhunjhunwala, is a R&D driven biopharma company. The company is into the manufacture of Active Pharmaceutical Ingredients (API) via fermentation and semi-synthetic processes. It is also into the manufacture of finished formulations. The company has transformed from being a single-product company to a wide-spectrum solution provider. It offers products and solutions across diversified therapeutic segments. It has an established presence in 70 countries worldwide with distribution set-ups in place in the US, Europe, Japan, Latin America, Africa, and Asia. It also has a significant presence in the domestic market.  The company is currently partnering with leading global pharma giants to meet their product development needs for APIs and formulations.

Concord Biotech Ltd has 3 manufacturing facilities comprising of 2 API manufacturing units and one finished formulation unit. All the units are located in Gujarat. The Unit I at Dholka facility manufactures different classes of APIs. The Unit II at Valthera facility is into formulations manufacturing. It has manufacturing units for oral solids, including tablets and capsules, as well as oral liquids, including oral solutions and oral suspensions. Concord is also developing liquid and lyophilized vials injectable line, a dry powder injectable line and a sterile powder bulk lyophilization line, which will be dedicated to manufacturing of injectables, including injectable liquids, lyophilized injectables and dry powder injectables. Finally, the Unit III, Limbasi facility is also an API manufacturing facility with 24 fermenters.

The issue is jointly lead managed by Kotak Mahindra Capital, Citigroup Global Markets and Jefferies India. Link Intime India Private Ltd will be the registrars to the issue. The entire IPO is an offer for sale, purely to give an exit to the seller, Helix Investments. However, this will also facilitate increase in free float and enable listing of the stock on the stock exchanges.