Glenmark Life Sciences IPO shares: Experts say that shareholders who subscribed for listing gains can book profits now, but the stock also has good long-term prospects, given its strong fundamentals
Sunil Shankar Matkar
August 06, 2021 / 02:10 PM IST
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Glenmark Life Sciences missed listing expectations of opening 10-15 percent above the issue price on its first day of trading on August 6, but later managed an 11 percent in the first 15 minutes before retreating again.
Most analysts advised booking profits for those who subscribed for listing gains, but they said the stock can also be held for long term considering the strong fundamentals.
The stock opened at Rs 751.10, 4.3 percent over the issue price of Rs 720 per share, rallied up to Rs 799.95 intraday but came down to Rs 750 levels.
At the time of publishing this copy, it was trading at Rs 755.55, up 4.94 percent on the BSE. Combined traded volume of Glenmark Life on the bourses (BSE and NSE) was 1.77 crore equity shares.
“We are recommending to book profit to those who have applied only for listing gain perspective at 10-15 percent premium while those who can hold for long term can keep partial holding and book remaining profit as the company having leadership in select high value, non-commoditized APIs in chronic therapeutic areas enjoys strong relationships with leading global generic companies,” Astha Jain, Senior Research Analyst at Hem Securities told Moneycontrol.
Also, “company’s quality-focused compliant manufacturing and R&D infrastructure, strong focus on sustainability in operations along with cost leadership across products is demonstrating strong fundamentals of the company,” she said.
Prashanth Tapse, VP Research at Mehta Equities also recommended allotted investors to book profits on listing day and said if non-allotted investors wish to buy on a listing day, it is better to wait and watch to accumulate at a better pricing range.
Glenmark Life Sciences raised Rs 1,513.60 crore through its public issue that was subscribed 44.17 times during July 27-29, 2021.
The company develops, manufactures, and supplies high-quality active pharmaceutical ingredients (APIs) in chronic therapeutic areas, including cardiovascular disease (CVS), central nervous system disease (CNS), pain management, diabetes, gastro-intestinal disorders, anti-infectives and other therapeutic areas.
It also operates in contract development and manufacturing operations (CDMO) to offer services to a range of multinational and specialty pharmaceutical companies. It has a portfolio of 120 molecules globally and sold APIs in India and exported to multiple countries in Europe, North America, Latin America, Japan and the rest of the world (ROW).
Prashanth Tapse of Mehta Equities is optimistic about this company considering its niche and specialized products portfolio, parent group’s credentials, strong relationships with global generic companies, expected growth in CDMO business and knowledge in regulatory environment & approvals in the markets.
“With government’s intervention and hope to revive the Indian API industry and make a significant contribution to the achievement of Atmanirbhar Bharat, wherein Glenmark Life is well placed to tap the demand going forward,” Tapse said.
Akhilesh Jat, Pharma Analyst at CapitalVia Global Research also feels the fundamentals of Glenmark Life is quite strong and it can give good returns in the long term.
“Glenmark Life Sciences raised Rs 1,513.6 crore through public issue which will help Glenmark Pharma in value unlocking for the API business where the demand outlook remains robust. However, many unknowns remain for the API business given the recent strong performance was driven by Covid-19-led higher demand and customer stocking to a large extent,” he said.
Glenmark Life currently operates 4 multi-purpose manufacturing facilities which are situated on leasehold properties located at Ankleshwar & Dahej in Gujarat, and Mohol & Kurkumbh in Maharashtra, with an aggregate annual total installed capacity of 726.6 KL as of March 31, 2021.
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