Innova Captab lists at 2% premium at Rs. 456 per share on the BSE

Innova Captab Limited, a prominent pharmaceutical company that provides contract development and manufacturing services to Indian pharmaceutical companies, debuted on the Indian stock market today.

Upon its debut on the BSE, the stock opened at Rs 456.10 per share, reflecting a 1.81% premium compared to the final issue price of Rs 448 per share. Meanwhile, on the NSE, the stock debuted at Rs 452.10 per share, nearly flat compared to its final issue price. The current market capitalisation of the company stands at Rs 2,610 crore.

IPO Proceeds 

The company intends to use the net proceeds from the Fresh Issue for the following purposes: Investment in the subsidiary UML for repayment or prepayment in part or full of outstanding loans availed by UML, repayment, or prepayment in part or in full of certain borrowings availed by the company, funding the working capital requirements, and addressing general corporate purposes.

Company profile

Innova Captab Limited is a pharmaceutical company that operates in three business segments. Firstly, it provides contract development and manufacturing services to Indian pharmaceutical companies. Se

condly, the company has a domestic business dealing in branded generics. Thirdly, it operates an international business that deals in branded generics. The company’s product portfolio includes tablets, capsules, dry syrups, dry powder injections, ointments, and liquid medicines. The company’s customer base includes Cipla, Glenmark Pharmaceuticals, Wockhardt, Corona Remedies, Emcure Pharmaceuticals, Lupin, Medley Pharmaceuticals, Eris Healthcare, Zuventus Healthcare, Ajanta Pharma, Mankind Pharma, and others. The company was incorporated in 2005.

Subscription details

On December 26, 2023, the final day of the IPO window, the IPO witnessed an impressive response, with a subscription rate of 55.26 times. The public issue received remarkable interest, with the retail category being subscribed 17.15 times, the QIB category achieving a subscription rate of 116.73 times, and the NII category reaching a subscription rate of 64.95 times.

The company attracted Rs 171 crore from various anchor investors by allocating 38.16 lakh equity shares at Rs 448 per share. The complete lock-in period for these anchor investors ends on May 10, 2024.

The IPO price range was set between Rs 426 and Rs 448, with a face value of Rs 10 per share and a lot size of 33 shares. The total size of the company’s IPO was Rs 570 crore, and the final share issue price was fixed at Rs 448 each.

Financial Performance

Conclusion

The key dilemma for investors lies in whether to hold onto their shares. Those who applied for the IPO solely intending to capitalise on listing gains have earned only a 2% return over its final issue price on the listing day, which is less, especially when compared to recent listing IPOs. Investors who applied for the IPO purely for listing gains may consider closing their positions. Conversely, investors with a higher risk tolerance might opt to hold onto their shares for the medium to long term, as this strategy could potentially yield benefits over time.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.