The Akums Drugs and Pharmaceuticals IPO has generated significant interest, with the Nifty 50 nearing 25,000 in a bullish market. On its first day, the IPO was fully booked.
Subscription Status
The retail portion was fully subscribed within an hour of opening. The public subscription period runs from July 30 to August 1, with a price range of ₹646 to ₹679 per share. Before the public subscription, Akums raised ₹829 crore from anchor investors.
By the second day, the IPO had a subscription status of 1.37 times. The retail portion saw 3.35 times subscription, non-institutional investors 1.96 times, and qualified institutional buyers (QIBs) 43%. The employee portion was subscribed 1.07 times.
The company has allocated 75% of the issue size for QIBs, 15% for non-institutional investors, and 10% for retail investors. Investors can bid for a minimum of 22 shares and multiples thereafter.
Company Background
Founded in 2004, Akums is a contract development and manufacturing organization (CDMO) offering a wide range of pharmaceutical products and services in India and abroad.
Expert Reviews
Highbrow Securities:
Tarun Singh, MD of Highbrow Securities, highlights Akums’ strong track record, large clientele, robust R&D, and key position in the pharmaceutical value chain. However, he advises caution due to the company’s focus on acquisitions for inorganic growth and the fact that over 60% of the earnings are for existing stakeholders’ exit. Only 35% of the IPO funds are for reinvestment, raising questions about the promoters’ long-term vision.
Stoxbox:
This brokerage points to Akums’ strong domestic CDMO presence and international export activities, giving it a competitive edge. The company’s robust growth is attributed to its market leadership, strategic initiatives, focus on R&D, and strong manufacturing capabilities. With a reasonable P/E of 29.7x, Stoxbox recommends subscribing to the IPO.
IPO Details
The ₹1,857 crore IPO includes a fresh issue of ₹680 crore and an offer-for-sale (OFS) of 17,330,435 shares by promoters and other investors. Promoters Sanjeev and Sandeep Jain will each sell 15.12 lakh shares, while Ruby QC Investment Holdings Pte Ltd will offload 1.43 crore shares. Proceeds will be used to pay off debt, fund inorganic growth projects, and meet working capital needs.
The book-running lead managers are ICICI Securities Ltd, Axis Bank Ltd, Citigroup Global Markets India Pvt Ltd, and Ambit Pvt Ltd. Link Intime India Pvt Ltd is the registrar.
Grey Market Premium
The grey market premium (GMP) for Akums Drugs today is +177, suggesting a potential listing price of ₹856 per share, which is 26.07% higher than the IPO price of ₹679. This indicates strong investor interest in paying above the issue price.
Disclaimer: The views and investment tips expressed by investment experts on Sharepriceindia.com are their own and not those of the website or its management. Sharepriceindia.com advises users to check with certified experts before taking any investment decisions.
