Concord-Biotech-Ltd-IPO
You would have heard the term APIs during the Covid-19 pandemic and the struggle to acquire them by even developed countries like the US and across Europe. They are the base for pharmaceutical drugs, therefore, have a huge demand in the pharma sector. The pandemic also made the world recognize India as the world’s pharmacy giving a further boost to the domestic pharma sector. Investors have the opportunity to be part of the growth story of this sector in the form of a new IPO by Concord Biotech Limited IPO, an API manufacturing and selling company.
Concord Biotech Limited IPO will open for subscription from 4th August 2023 to 8th August 2023.
Here are all the important details of Concord Biotech Limited, including investment price band, allotment date, GMP, benefits, risks of investing in this IPO, and more.
The key details of Concord Biotech Limited are as under.
The size of the IPO and different categories of the issue are:
| Category | Details |
| IPO Opening Date | 4th August 2023 |
| IPO Closing Date | 8th August 2023 |
| Listing | NSE, BSE |
| Issue Type | Book Built Issue IPO |
| Face Value of shares | Re. 10 per share |
| IPO Price Band | Rs. 705 – Rs. 741 per share |
| IPO Size | Rs. 1,551 crores (20,925,652 shares) |
| Offer for Sale | Rs. 1,551 crores (20,925,652 shares) |
| Fresh Issue | 0 |
The important dates for Concord Biotech Limited IPO are highlighted below:
| Event | Date |
| Opening date | 4th August 2023 |
| Closing Date | 8th August 2023 |
| Allotment date | 11th August 2023 |
| Refund Date | 14th August 2023 |
| Share Credit Date | 17th August 2023 |
| Listing Date | 18th August 2023 |
Investors can subscribe to Concord Biotech Limited shares in pre-defined lots. The details of the lot sizes for this IPO are mentioned below:
| Category | Details |
| Investments in lots | Minimum – 1 lot Maximum – 13 lots |
| Investment amount | Minimum – Rs. 14,100 – 14,820 Maximum – Rs. 1,92,660 |
| Shares | Minimum – 20 Maximum – 260 |
Here’s the summary of reservation for different applicant categories in this IPO:
| Category of Investor | Reservation Percentage |
| Retail Individual Investors | 35% |
| QIB (Qualified Institutional Buyers) | 50% |
| NII (Non-Institutional Bidders) | 15% |
This IPO is an Offer for Sale. The objective of the IPO is to get the listing benefits and carry out the Offer for Sale of up to 20,925,652 Equity Shares by the selling shareholder.
Established in 1984, Concord Biotech Limited is a biopharmaceutical company based in India that prioritises research and development in its operations. Renowned for its expertise in fermentation-based APIs within the immunosuppressant and oncology segments, the company has attained a prominent global standing and market share in terms of volume in 2022.
What started as a single product has evolved into a comprehensive range of solutions, making Concord Biotech a versatile solution provider. The company specializes in the production of Active Pharmaceutical Ingredients (APIs) using fermentation and semi-synthetic processes, as well as finished formulations, and has a strong presence in over 70 countries including key markets like the USA, India, Europe, and Japan.
Did you know
Late stock investor Rakesh Jhunjhunwalal’s asset management arm Rare Enterprises, holds approx 24% stake in Concord Biotech Ltd.
Concord Biotech’s product portfolio includes fermentation and semi-synthetic-based offerings in therapeutic segments such as Immunosuppressants, Anti-bacterial, Oncology, Antifungals, and more. The diverse range of products has garnered widespread customer acceptance globally. Additionally, the company has an ambitious pipeline of products currently under development, ensuring continued growth and innovation.
Concord Biotech Limited’s financials are given in the table below:
| Year | Total Assets (Rs. in cr) | Total Revenue (Rs. in cr) | Profit after Tax (Rs. in cr) | Basic EPS | Return on Net Worth |
| Mar-2023 | 1,514 | 853 | 240 | Rs.22.95 | 20.06% |
| Mar-2022 | 1,313 | 723 | 175 | Rs.16.72 | 16.64% |
| Mar-2021 | 1,182 | 617 | 235 | Rs.22.45 | 26.55% |
(Source: RHP)
Some of the key strengths of Concord Biotech Limited IPO that investors can take note of are
| Category | Details |
| Business model | The company has a strong presence across the complex fermentation value chain and also has scaled manufacturing facilities, a proven record of regulatory compliance, and robust R&D capabilities.They also have global leadership in the manufacture of immunosuppressant APIs along with a wide spectrum of complex fermentation-based APIs across multiple therapeutic areas.The company also boasts of a growth-focused financial track record and consistent profitability that is coupled with healthy cash flows and shareholder returns. |
| Other merits | Concord Biotech has long-standing relationships with key customers and also has an experienced team of promoters and management that are supported by marquee investors. |
Here are some of the risks that investors of Concord Biotech Limited IPO should know:
| Category | Details |
| Business viability and profitability | The revenue concentration is in the hands of limited customers and any reduction in the same will be detrimental to the businessThe business can be adversely affected by factors like slowdown or shutdown in manufacturing or research and development operations, delay or interruption or reduction in the supply of the raw materials or the transportation of raw materials or product, manufacturing or quality control issues which may damage the company’s reputation and open it for litigation, etc. |
| Other concerns | The company faces competition from hospitals, pharmacies, and other healthcare service providers.They are subject to extensive government regulations and statutory compliances. Any delay or failure in obtaining, maintaining, and renewing the same will damage the business prospects. |
As of August 2nd, 2023, the grey market premium for the shares of Concord Biotech Limited IPO is Rs. 180 as per market observers. This means the shares are expected to list at a premium of Rs. 180 per share over the listing cap price of Rs. 741.
Concord Biotech Limited belongs to a niche sector that has tremendous growth potential and demand from domestic and international markets. They saw a reduction in their revenues and profits in FY 21-22 but recovered the same in FY 22-23. While the growth potential and initial buzz of the IPO seem good, it is advisable that investors focus on the company’s fundamentals and performance as well as the growth prospects of the business before investing in it.
Investors can invest in this IPO through the Fisdom app.
The core APIs manufactured by Concord Biotech Limited include fermentation and semi-synthetic-based API products in therapeutic segments such as Immunosuppressants, Anti-bacterial, Oncology, Antifungals & others.
The EBITDA margin for Concord Biotech Limited for the year ending March 2023 is 40.47% which is higher than its listed peer Divi’s Laboratories Limited which has an EBITDA margin of 30.48%.
Concord Biotech Limited has established three manufacturing facilities in Gujarat, which include API manufacturing units located in Dholka and Limbasi, as well as a formulation manufacturing facility in Valthera.
During the period from 2022 to 2026, the domestic API market in India is projected to grow at a Compound Annual Growth Rate (CAGR) of 11.1%.
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