Concord Biotech IPO: All You Need To Know

The business has set aside up to 10,000 equity shares under the IPO for subscription by eligible employees. (Source: Concord Biotech's Website)

Concord Biotech Ltd. will launch its initial public offering on Aug. 4.

The India-based biopharma company's IPO comprises 20.93 million equity shares by Helix Investments through an offer for sale. This represents 20% of the pre-offer shareholding of the company.

Out of the total IPO size, up to 50% of the net offer is reserved for qualified institutional buyers, while a minimum of 15% is set for non-institutional investors. At least 35% is to be allotted to retail individual investors. The business has set aside up to 10,000 equity shares under the IPO for subscription by eligible employees, with a discount of Rs 70 per equity share being offered to them.

Issue Details

Issue opens: Aug. 4.
Issue closes: Aug. 8.
Face value: Re 1 per share.
Shares for OFS: 2,09,25,652 shares.
Price band: Rs 705 to Rs 741 per share.
Offer for sale: Rs 1550.6 crore.
Lot size: 20 shares.
Listing: BSE and NSE.

The company has not undertaken any pre-offer placements.

Business

Concord Biotech is a leading India-based biopharma company that specialises in fermentation-based active pharmaceutical ingredients. They supply immunosuppressants and oncology APIs to over 70 countries, including regulated markets like the U.S., Europe, and Japan. With a market share of over 20% by volume in 2021, the company is among the few successfully scaled-up fermentation-based API manufacturers.

Their API portfolio includes immunosuppressants and other therapeutic areas, such as anti-infectives and oncology drugs. Concord Biotech has invested significantly in capacity expansion and filed over 120 Drug Master Files for their APIs. They have obtained certification of suitability to the monographs of the European Pharmacopoeia for 13 APIs.

They also operate in the formulations segment, marketing critical care drugs in India and globally through business-to-business arrangements.

Use of Proceeds

Helix Investments, the selling shareholder, will be entitled to the entire proceeds of the offer after deducting expenses and relevant taxes thereon.

The company will benefit from listing equity shares on the stock exchanges.

Risk Factors

High reliance on the top three suppliers (54.3% of purchases) in the last three fiscals.
Significant import dependency (94.18% from China) for raw materials in the last three fiscals.
The top five customers accounted for 33.82% of revenue in the past three fiscals.
Vulnerability to industrial accidents, power disruptions, and natural disasters at Gujarat facilities.
Regulatory risk in both domestic and international markets due to a highly regulated industry.
Exchange rate risk with ~53.65% revenue generated from exports in the past three fiscals.