Concord Biotech Stock Lists At 21% Premium Over IPO Price; Should You Buy, Sell Or Hold?

Concord Biotech Listing BSE, NSE: Shares of Concord Biotech listed at a premium of 21 per cent over the IPO price of Rs 741 on the exchanges in Friday’s trade. On both NSE and BSE, the share debuted at Rs 900 apiece, a premium of Rs 159 as against the issue price.

Most experts feel the subdued market conditions seen in the last three-odd weeks had some impact on the listing performance. Apart from subdued market conditions, the company not receiving any money from the public issue, and inconsistent financial performance in the past are other reasons listed by them.

The Concord Biotech IPO concluded last week with an overall subscription of almost 25 times the equity on offer.

The maiden public issue of the Ahmedabad-based pharma company, which comprised only an offer-for-sale (OFS) portion, was subscribed 24.87 times during August 4-8 with qualified institutional buyers (QIBs) buying 67.67 times the allotted quota and high net-worth individuals (HNIs) 16.99 times.

The recent trading premium of the biotech pharma company in the grey market was around 15 per cent to the final issue price, which has seen a significant deterioration in the last couple of weeks. After the IPO price band announcement at the beginning of this month, it was quoting at a premium of 35-40 percent over the upper price band.

The grey market is an unofficial market for IPO shares, which can be bought and sold till the listing.

Concord Biotech raised Rs 1,551 crore from the public issue of 2.09 crore equity shares. Helix Investment Holdings, which is backed by Quadria Capital Fund LP, barring issue expenses, has received all the IPO money and exited the company by selling its entire 20 percent stake through the IPO.

What Should Investors Do Now?

Anubhuti Mishra, Equity Research Analyst at Swastika Investmart Ltd., said: “Today, Concord Biotech Limited made its debut on the stock markets by going public at Rs 900 per share, 21.46% higher than its IPO price of Rs 741. Concord Biotech is a leading API company with a proven track record. The company manufactures and exports APIs for a wide range of therapeutic areas. However, the company’s international operations expose it to various complex risks. Additionally, this industry has been facing margin pressure recently. Overall, the listing of Concord Biotech was in line with expectations. The company’s strong fundamentals and good subscription levels were positive factors for this. Investors who participated in the IPO should consider booking profits post-listing.”