Akums Drugs IPO day 3: Latest GMP, subscription status to review. Should you apply?

Akums Drugs IPO subscription status: The initial public offering of Akums Drugs and Pharmaceuticals Ltd continued to receive strong response on the last day of bidding today led by qualified institutional buyers and non institutional investors. Akums Drugs and Pharmaceuticals IPO subscription status was 63.44 times, as per BSE data.

The share sale received bids for 96,18,57,204 shares, as against 1,51,62,239 shares on offer, according to BSE data.

The quota for non institutional investors received 42.10 times subscription, while the retail investors part got subscribed 20.80 times. The portion for Qualified Institutional Buyers (QIBs) received 90.09 times subscription, and the employee portion was booked 4.14 times. 

On its second bid day, investors responded well to Akums Drugs and Pharmaceuticals' initial public offering, which came as the Nity 50 was about to reach 25,000 levels in a bull market. BSE data indicates that Akums Drugs and Pharmaceuticals IPO subscription status is 4.43 times.

Retail investors' quota was subscribed to 8.98 times, while non-institutional investors' portion was subscribed to 8.48 times. 96% of the subscription was for the section designated for qualified institutional buyers (QIBs), while 2.23 times subscription were made for the employee portion.

Akums Drugs & Pharmaceuticals IPO attracted a great level of interest from investors; on its first day, it was completely booked.

An hour after it launched, the retail sector had a complete subscriber base. The public subscription period for the offer, which began on July 30 will conclude today (Thursday,August 1). The issue price band has been set in the range of ₹646 to ₹679. The company said on Monday that, prior to the start of the public subscription period for its share sale, it had obtained ₹829 crore from anchor investors.

Akums Drugs and Pharmaceuticals IPO subscription status was 1.37 times.The retail investor portion had a subscription that was 3.35 times greater than the non-institutional investor element, which had a 1.96 times higher subscription. Of all buyers, 43% were subscribed by qualified institutional buyers, or QIBs. 1.07 times as many subscriptions were received by the employee component.

75% of the issue size has been set aside by the firm for qualified institutional buyers, while 15% for non-institutional investors and 10% for retail investors. Investors can bid for a minimum of 22 equity shares and in multiples thereof.

As a pharmaceutical contract development and manufacturing organisation (CDO), Akums was founded in 2004. Both domestically in India and globally, it offers a broad range of pharmaceutical products and services.

As of September 30, 2023, some of the company's main clients include Alembic Pharmaceuticals, Alkem Laboratories, Cipla, Dabur India, Dr. Reddy's Laboratories, Hetero Healthcare, Ipca Laboratories, Mankind Pharma, MedPlus Health Services, Micro Labs, Mylan Pharmaceuticals, Natco Pharma, Sun Pharmaceutical Industries, and Amishi Consumer Technologies (The Mom's Co).

Akums Drugs IPO review

Swastika Investmart

The brokerage claims that although the firm has shown top-line growth, non-operational variables like fair value adjustments have had an impact on its profitability. Nonetheless, the company's established market position and room for expansion support its long-term prospects.

The brokerage highlighted that regulatory scrutiny, possible production or quality control problems, and geographic concentration are the main dangers. It is important to give serious thought to these aspects.

The IPO is valued at a fair P/E of about 28x, excluding adjusted put call liabilities. The brokerage advises a cautious approach to the IPO, with investors carefully weighing the aforementioned risks before making an investment choice, given the company's market leadership, growth potential, and value.

Dilip Davda, the contributing editor at Chittorgarh.com

According to Davda, the firm enjoys a leadership position in the CDMO industry and counts several blue-chip domestic and international pharmaceutical companies among its devoted clientele. The IPO is priced at a P/E of 29.79 based on FY24 results if we take into account the revised performance excluding put call obligations. The issue looks to be completely priced. Capital for the medium to long term may be parked by investors.

Akums Drugs and Pharmaceuticals IPO details

Akums Drug IPO, which is worth ₹1,857 crore, comprises a fresh issue of ₹680 crore, and an offer-for-sale (OFS) of 17,330,435 equity shares by the promoters and other investors.

In the OFS, investors Ruby QC Investment Holdings Pte Ltd would be offloading 1.43 crore shares, while promoters Sanjeev and Sandeep Jain will each sell 15.12 lakh equity shares.

The net proceeds from the new issuance will be used to pay off the company's and its subsidiaries' (Pure and Cure Healthcare, Maxcure Nutravedics, and Pure) obligations. The proceeds from the IPO will also be used for inorganic growth projects and increased working capital needs.

The book running lead managers for the Akums Drugs and Pharmaceuticals IPO are ICICI Securities Ltd, Axis Bank Ltd, Citigroup Global Markets India Private Ltd, and Ambit Private Ltd. The registrar for the offering is Link Intime India Private Ltd.

Akums Drugs IPO GMP today

Akums Drugs and Pharmaceuticals IPO GMP today or grey market premium is +170. This indicates Akums Drugs share price were trading at a premium of ₹170 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Akums Drugs share price was indicated at ₹849 apiece, which is 25.04% higher than the IPO price of ₹679.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.