Akums Drugs Stock Listing : The stock of Akums Drugs and Pharmaceuticals, the country’s leading company that manufactures medicines through contract manufacturing, has had a weaker listing than expected in the stock market today. This stock was listed on the BSE at Rs 725 as compared to its IPO price of Rs 679. However, within a short time, this stock rose 16 percent from the IPO price to Rs 785. However, this IPO received about 64 times subscription. In such a situation, those who got shares in this IPO have got 16 percent profit. The question arises whether those who got profit in this IPO should sell the shares or maintain the position.
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It was subscribed 63.44 times
Akms Drug’s IPO was subscribed 63.44 times overall. In this IPO, 75 percent of the share was reserved for qualified institutional buyers (QIBs) and it was subscribed approximately 90.09 times. At the same time, 15 percent of the issue was reserved for non-institutional investors (NII) and it was subscribed 42.10 times. While 10 percent was reserved for retail investors and it was subscribed 20.80 times overall. In this, shares worth Rs 15 crore were reserved for employees and a total of 4.14 times applications were received for it. Employees have also been given a discount of Rs 64 on each share.
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Should I maintain my position?
Shivani Nyati, Head of Wealth, Swastika Investmart, says that Akms Drugs and Pharmaceuticals, a leading CDMO company, made a slow start in the stock market and debuted at Rs 725 per share, which is about 7 percent higher than the IPO price of Rs 679. While the IPO received a strong subscription of 63.44 times and the movement in the grey market was also positive about it. At present, the listing of this stock remained below expectations, which was probably affected by the current market volatility.
The company’s strong fundamentals and market position provide long-term growth prospects, but investors should carefully assess the risks and market volatility. Investors with a long-term view can maintain their position by placing a stop loss at its IPO price.
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Understand in 10 points: Special things related to the company
1. Akms Drugs & Pharmaceuticals is a leading Contract Development and Manufacturing Organization (CDMO) in India with a diversified customer base, strong R&D capabilities and strategic presence across the pharmaceutical value chain.
2. The company has demonstrated top-line growth, but its profitability has been impacted by non-operational factors such as fair value adjustments.
3. The company’s long term prospects are supported by its established market position and growth potential.
4. Key risks with the company include geographical concentration, potential manufacturing or quality control issues, and regulatory scrutiny. These factors need to be carefully considered.
5. The Company has several new efficiencies in its operations and there is also the impact of some recent adjustments made by the Company.
6. Current capacity utilisation at 40% leaves ample scope for future growth along with scale advantage.
7. Continued focus on providing cost effective products should aid topline growth along with improving margins.
8. Excluding adjusted put call liabilities, the IPO is valued at a reasonable P/E of around 28x.
9. Diverse client base with long term CDMO relationships
10. Large and rapidly growing research and development capabilities across its product portfolio
(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.)
