Shares of diagnostic chain Dr Lal PathLabs jumped over 53 per cent on Wednesday in blockbuster debut. Dr Lal PathLabs shares rose to an intraday high of Rs 843.70 on the National Stock Exchange as compared to the issue price of Rs 550.
Dr Lal PathLabs' initial public offer (IPO) was a big success, with the issue getting subscribed 33.41 times. Dr Lal PathLabs' IPO was not only a big hit among institutional investors, but more importantly, it also got good response from small investors, with the retail category getting subscribed 4.24 times.
Dr Lal PathLabs had raised nearly Rs 640 crore from its IPO, which went to promoters and private equity players, who offloaded part of their stake in the company.
Analysts have praised Dr Lal PathLabs' scalable business model, which has helped the company expand quickly with low capital. Instruments are leased, while most sample collection centers are franchised out, so the company enjoys economies of scale and lower capital expenditure, experts say.
Dr Lal PathLabs' retail business (walk-in clients) contributes around two third of its revenue while the remaining is contributed by institutional business.
Dr Lal PathLabs shares closed 50 per cent higher at Rs 825 on the NSE. Shares of generics drugmaker Alkem Laboratories also got listed today. Alkem also got off to a stellar start, with shares rising nearly 33 per cent to hit a high of Rs 1,401. The stock closed 31 per cent higher at Rs 1,381.70.
2015 has turned out to be a great year for IPOs. Out of total 18 initial public offerings (IPOs) that hit the market in CY2015, 10 public issues offered average to robust return.
VRL Logistics, SH Kelkar, Power Mech Projects, Syngene International and InterGlobe Aviation (the company that runs budget carrier IndiGo) are some IPO that helped investors make good money this year.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
