On October 6, Valiant Laboratories witnessed its shares listing at a premium of 15.8 percent above its IPO price of Rs 140. The stock debuted at Rs 162.15 on the NSE and Rs 161 on the BSE, aligning with analyst expectations and the strong subscription numbers seen during the IPO.
The IPO, which amounted to Rs 152 crore, received robust demand, with an oversubscription rate of 29.76 times. Investors eagerly purchased 22.68 crore shares against the offer size of 76.23 lakh. High net worth individuals oversubscribed their share quota by a substantial 73.64 times, while retail investors went for 16.06 times the allocated shares.
Valiant Laboratories specializes in the manufacturing of active pharmaceutical ingredients and bulk drugs, with a primary focus on producing paracetamol.
The proceeds from the IPO will be utilized to establish a specialty chemicals manufacturing facility in Gujarat owned by its subsidiary, Valiant Advanced Sciences (VASPL). Additionally, the IPO funds will cover the subsidiary’s working capital requirements.
Analysts considered the IPO pricing, which stood at 15.71x at the upper end of the price band, as fair. The company boasts impressive return ratios, with a 33.73 percent return on equity and a 22.76 percent return on capital employed for FY23. However, analysts also highlighted potential risks, such as the company’s reliance on a single product and client concentration, which investors should monitor closely.
On the financial front, Valiant Laboratories demonstrated growth, with net profit increasing to Rs 29 crore for the fiscal year ending March 2023, up from Rs 27.5 crore in the previous year. Revenue from operations also witnessed a healthy growth of 14.5 percent, reaching Rs 333.9 crore compared to Rs 291.5 crore in the same period.