Akums Drugs and Pharmaceuticals IPO : The IPO of Akums Drugs and Pharmaceuticals, the country’s leading company manufacturing medicines through contract manufacturing, has opened today on Tuesday i.e. 30 July. The size of the IPO is Rs 1855 crore. While the company has fixed the price band for this from Rs 646 to Rs 679 per share. This IPO will be open for subscription from 30 July to 1 August 2024. Allotment of shares will be done on 2 August and these shares will be listed on NSE and BSE on 6 August. If you are also preparing to invest in IPO, then understand its positives and negatives.
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Invest with caution
Shivani Nyati, Head of Wealth, Swastika Investmart has given a subscribe rating on the IPO of Akms Drugs. She says that Akms Drugs and Pharmaceuticals is a leading contract development and manufacturing organization (CDMO) in India with a diversified customer base, strong R&D capabilities and strategic presence in the pharmaceutical value chain. Although the company has demonstrated top-line growth, its profitability has been affected by non-operational factors such as fair value adjustments. However, the company’s long-term prospects are supported by its established market position and growth potential.
Key risks include geographical concentration, potential manufacturing or quality control issues, and regulatory scrutiny. These factors need to be carefully considered. Excluding adjusted put call liabilities, the IPO is valued at a reasonable P/E of around 28x. Given the company’s market leadership, growth prospects, and valuation, we recommend cautious subscription to the IPO; investors should carefully assess all risks before making an investment decision.
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Invest for the long term
Brokerage house Smifs has advised to subscribe to Akms Drugs IPO from a long-term perspective. The brokerage says that the company has a lot of new capacity for operations and there is also the impact of some recent adjustments made by the company. The current capacity utilization at 40 percent leaves ample scope for future growth along with scale advantage and continued focus on providing cost effective products should help in improving margins as well as topline growth.
About IPO
In this public offering, fresh equity shares worth Rs 680 crore will be issued. While shares worth Rs 1176.74 crore will be sold through OFS i.e. Offer for Sale. In this offer for sale, the promoters and existing investors are offering their 1.73 crore shares whose value is Rs 1176.74 crore. Out of which 15.1 lakh shares are being sold by Sanjeev Jain and Sandeep Jain and 1.43 crore shares are being sold by Ruby QC Investment Holdings through Offer for Sale. Currently, the total market value of the company is around Rs 10,000 crore.
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How much reserve for whom
75% of the IPO of Akms Drugs and Pharmaceuticals has been reserved for Qualified Institutional Buyers (QIB). 15% of the issue is reserved for non-institutional investors (NII). While 10% is reserved for retail investors. In this, shares worth Rs 15 crore have been reserved for employees. They will also get a discount of Rs 64 on each share.
Akums Drugs GMP 30%
There is a stir in the grey market regarding the IPO of Akms Drugs and Pharmaceuticals Limited. The unlisted stock of the company is at a premium of Rs 205 in the grey market. This is a 30 percent premium in terms of the upper price band of Rs 679.
(Disclaimer: Investing or selling stocks is advised by the brokerage house. These are not the personal views of Financial Express. There are risks in the market, so take expert advice before investing.)
