August 6, 2024
New Delhi, India
Akums Drugs and Pharmaceuticals
Shares of Akums Drugs and Pharmaceuticals began trading on August 6 with a lukewarm start, listing at Rs 725, a 6.7% premium over the issue price of Rs 679. The listing closely aligned with grey market expectations, where shares were trading at a premium of about 6%.
Key Highlights:
- IPO Details:
- The Rs 1,856.7-crore initial public offer (IPO) included a fresh issue and an offer-for-sale component.
- The IPO received substantial interest, with a subscription rate of 64.4 times.
- Subscription Breakdown:
- Qualified Institutional Buyers (QIBs) showed the highest demand, subscribing over 90 times their allocated shares.
- Non-institutional investors (NIIs) subscribed to their allotment over 42 times.
- Retail Individual Investors (RIIs) subscribed to 20.6 times their allocation.
- Company Overview:
- Akums is a contract development and manufacturing organization (CDMO) specializing in pharmaceutical products and services for Indian and international markets.
- The company provides end-to-end solutions, including product development, manufacturing, R&D of formulations, and other testing services.
- Use of IPO Proceeds:
- The funds raised will be used to repay the company’s and its subsidiaries’ debts.
- Additional funds will bolster working capital, support growth through acquisitions, and cover general corporate expenses.
- Financial Performance:
- For the fiscal year ending March 31, 2024, Akums reported a 13.81% increase in revenue.
- Despite the revenue growth, the company’s profit after tax (PAT) saw a significant decline of 99.19% compared to the previous year.
- Market Performance:
- The shares listed at Rs 725 on both NSE and BSE, reflecting a 6.77% premium over the issue price.
- Before the listing, shares were commanding a premium of Rs 40-50 per share in the grey market, indicating a listing pop of 5-6%.
- IPO Timeline and Pricing:
- The IPO ran from July 30 to August 1, offering shares in a fixed price band of Rs 646-679 per share.
- The lot size was 22 shares, and the total raised from the IPO was Rs 1,856.74 crore, which included a fresh share sale of up to Rs 680 crore and an offer-for-sale (OFS) of up to 1,73,30,435 equity shares.
- Investor Interest:
- The IPO saw robust interest, with a total subscription rate of 63.56 times.
- The QIB quota was subscribed 90.09 times, NIIs 42.21 times, retail investors 21.30 times, and employees 4.27 times.
- Company Background:
- Established in 2004, Akums Drugs and Pharma is a CDMO that offers a wide range of pharmaceutical products and services.
- The company is involved in the manufacture and sale of branded drugs and active pharmaceutical ingredients (APIs).
Akums Drugs and Pharmaceuticals made a modest debut on the stock exchanges with a 6.7% premium over the IPO price. The IPO’s strong subscription rates and robust investor interest reflect confidence in the company’s potential, despite recent financial performance challenges. Investors will be watching closely to see how Akums leverages the IPO proceeds to drive future growth and stability.
Disclaimer:
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