Laurus Labs debuts at Rs 490 on BSE, 14.5% premium to issue price
The drugmaker sold its Rs 1,332 crore initial public offering (IPO) between December 6 and December 8, which was subscribed 4.52 times.
By Amit Mudgill, ETMarkets.com |
NEW DELHI: Laurus Labs on Monday made a strong debut on BSE, as the scrip got listed at Rs 490, a 14.49 per cent premium to issue price of Rs 428 apiece.
On NSE, the scrip got listed at Rs 489.90, up 14.46 per cent over the issue price.
The stock eventually closed the day at Rs 480.50 on BSE, up 12.27 per cent. On NSE, the scrip settled the day at Rs 480, up 12.15 per cent.
The drugmaker sold its Rs 1,332 crore initial public offering ( IPO) between December 6 and December 8, which was subscribed 4.52 times. The issue had received bids for 10.02 crore shares against 2.19 crore shares on the block.
The company had fixed a price band of Rs 426-428 per equity share of face value of Rs 10 each and the portion kept aside for qualified institutional buyers (QIBs) got subscribed 10.54 times. The quotas for HNIs (3.58 times) and retail investors (1.67 times) too got fully subscribed.
At the issue price, the stock was valued at 32 times FY16 PE and 30 times H1FY17, which was at a 20-25 per cent premium to the drugmarkers’ peers in the active pharmaceutical ingredient (API) segment
“Accounting for FY2017E PAT, the valuation still looks high at a PE of 28 times. We believe this kind of valuation is commanded only by thise domestic pharma companies, who have branded formulations business, healthy product pipeline and strong return ratios,” Angel Broking said in a note.
Laurus' business is highly client-concentration, low pricing power asset-heavy model, the bropkerage had said. The company intends to utilise the proceeds from fresh share issue to pre-pay term loans and for other general corporate purposes.
In FY16, the company said it had nine out of the 10 world’s largest generic pharmaceutical companies by revenues as its clients. The company deals in therapeutic areas of anti-retrovirals (ARVs or anti-AIDS) and Hepatitis C. It also manufactures APIs for oncology and other therapeutic areas.
The drugmaker reported an annual growth of 41 per cent (CAGR) and 60.6 per cent in revenue and net profit, respectively, between FY12 and FY16.
On NSE, the scrip got listed at Rs 489.90, up 14.46 per cent over the issue price.
The stock eventually closed the day at Rs 480.50 on BSE, up 12.27 per cent. On NSE, the scrip settled the day at Rs 480, up 12.15 per cent.
The drugmaker sold its Rs 1,332 crore initial public offering ( IPO) between December 6 and December 8, which was subscribed 4.52 times. The issue had received bids for 10.02 crore shares against 2.19 crore shares on the block.
The company had fixed a price band of Rs 426-428 per equity share of face value of Rs 10 each and the portion kept aside for qualified institutional buyers (QIBs) got subscribed 10.54 times. The quotas for HNIs (3.58 times) and retail investors (1.67 times) too got fully subscribed.
At the issue price, the stock was valued at 32 times FY16 PE and 30 times H1FY17, which was at a 20-25 per cent premium to the drugmarkers’ peers in the active pharmaceutical ingredient (API) segment
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“Accounting for FY2017E PAT, the valuation still looks high at a PE of 28 times. We believe this kind of valuation is commanded only by thise domestic pharma companies, who have branded formulations business, healthy product pipeline and strong return ratios,” Angel Broking said in a note.
Laurus' business is highly client-concentration, low pricing power asset-heavy model, the bropkerage had said. The company intends to utilise the proceeds from fresh share issue to pre-pay term loans and for other general corporate purposes.
In FY16, the company said it had nine out of the 10 world’s largest generic pharmaceutical companies by revenues as its clients. The company deals in therapeutic areas of anti-retrovirals (ARVs or anti-AIDS) and Hepatitis C. It also manufactures APIs for oncology and other therapeutic areas.
The drugmaker reported an annual growth of 41 per cent (CAGR) and 60.6 per cent in revenue and net profit, respectively, between FY12 and FY16.
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