Concord Biotech Limited IPO - Date, Review, Valuation & GMP

Concord Biotech Limited - Complete Overview

Established in 1984, Concord Biotech Limited, is an Indian biopharmaceutical company with a strong global presence.

It is a prominent developer and manufacturer of fermentation-based APIs in the fields of immunosuppressants and oncology, holding a significant market share based on volume in 2022.

Their products are supplied to more than 70 countries, including regulated markets like the United States, Europe, Japan, and India.

By the end of March 2023, the company boasted a total installed fermentation capacity of 1,250 m3. In 2016, Concord Biotech expanded its formulation business in India and emerging markets, such as Nepal, Mexico, Indonesia, Thailand, Ecuador, Kenya, Singapore, and Paraguay, and even ventured into the United States.

Concord Biotech has achieved a rare feat in establishing and scaling up fermentation-based API manufacturing capabilities successfully and sustainably.

They manufacture bio-pharmaceutical APIs through fermentation and semi-synthetic processes, catering to therapeutic areas like immunosuppressants, oncology, and anti-infectives. Additionally, they produce formulations used in immunosuppressants, nephrology drugs, and anti-infective drugs for critical care.

The company has an impressive track record of filing more than 120 Drug Master Files (DMFs) across various countries for their APIs, including 20, 63, and four in the United States, Europe, and Japan, respectively. Furthermore, they have obtained Certification of Suitability to the Monographs of the European Pharmacopoeia (CEPs) for 13 APIs as of March 31, 2022.

 

 

What does the company do? 

Concord Biotech Limited is a renowned Indian biopharmaceutical company, distinguished for its expertise in developing and manufacturing fermentation-based APIs specializing in immunosuppressants and oncology.

 

IPO Overview

The IPO date of Concord Biotech Limited is scheduled from August 4th to August 8th, 2023. The IPO price range is set at Rs. 705 to Rs.741 per share with a face value of Rs.1 per share. Additionally, the company is offering an employee discount of Rs.70 per share.

Regarding allocation, the company plans to allocate 50% of the shares to institutional investors, 15% to non-institutional investors, and 35% to retail investors. The shares are expected to be listed on the stock market on August 18th, 2023.

 

Concord Biotech Limited IPO timetable (Tentative)

EVENTS	DATE
IPO Opening Date	4 August 2023
IPO Closing Date	8 August 2023
IPO Allotment Date	11 August 2023
Refund initiation	14 August 2023
IPO Listing Date	18 August 2023

 

Concord Biotech Limited IPO Details

IPO Opening & Closing Date	4 August to 8 August 2023
Face Value	Rs. 1 per share
Issue Price	Rs. 705 to Rs. 741 per share
Lot Size	20 Shares
Price of 1 Lot	Rs. 14,820
Issue Size	20,925,652 shares (aggregating up to Rs.1,551.00 Cr)
Offer for Sale	20,925,652 shares (aggregating up to Rs.1,551.00 Cr)
Employee Discount	Rs.70 per share
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Link Intime India Pvt. Ltd.

 

Concord Biotech Limited IPO Lot Details

Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	13 Lot
Minimum Lot Investment (HNI)	14 Lot
Maximum Lot Investment (HNI)	67 Lot

 

Concord Biotech Limited IPO Reservation

Institution Portion	50%
Non-Institution Portion	15%
Retail Portion	35%

 

Company Financial

Amount in Crores

Period	FY 21	FY 22	FY 23
Total Assets	1182.55	1312.80	1513.98
Total Revenue	630.75	736.35	888.48
PAT	234.89	174.93	240.08
Net Worth	999.37	1103.22	1290.00
Total Borrowings	86.35	60.59	31.24

 

Revenue from operations by geography of Concord Biotech Limited

Particular	FY 21	FY 22	FY 23
India	2,526.53	3,374.13	4,321.34
USA	1,597.92	1,314.50	1,472.51
Rest of the world	2,044.98	2,440.70	2,737.83
Total	6,169.43	7,129.33	8,531.68

 

Annual production capacity, actual production volume and capacity utilization of the manufacturing facilities

Particular	FY 20	FY 21	FY 22
Unit I (Dholka)
Installed fermentation capacity(1) (m3 )	450	450	450
Actual fermentation volumes (m3 )	329	312	319
Capacity utilization (%)	73.01%	69.39%	70.93%
Unit II (Valthera)
Installed production capacity(1) (units in millions)	105.30	522.64	522.64 145
Actual production volumes (units in millions)	37.16	111.39	103.95
Capacity utilization (%)	35.29%	21.31%	19.89%
Dosage Capability (Per Shift)
Tablets	45,454.55	169,696.97	169,696.97
Capsules	60,606.06	357,575.76	357,575.76
Dry syrup (bottles)	303.03	646.46	646.46
Total per shift	106,363.64	527,919.19	527,919.19
Unit III (Limbasi) – Phase 1
Installed fermentation capacity(1) (m3 )	Nil	Nil	800
Actual fermentation volumes (m3 )	Nil	Nil	160
Capacity utilization (%)	Nil	Nil	20.00%

 

Objective of the Issue

The company is intended to fulfil following objectives:

• To attain the advantages of listing the Equity Shares on the Stock Exchanges.

• To conduct the Offer for Sale of up to 20,925,652 Equity Shares by the Selling Shareholder.

 

Promoters and Management of Concord Biotech Limited

The key promoters of the company consist of Sudhir Vaid, aged 69 years, who serves as the Chairman and MD, and Ankur Vaid, aged 40 years, who holds the position of Joint MD and CEO at the Concord Biotech Limited.

Pre-issue Promoters Holding	44.08%
Post-issue Promoters Holding	44.08%

 

Peer Comparison

As per the Concord Biotech Limited DRHP, the following companies are its peers.

Company Name	Revenue from operations for Financial Year 2022 (Rs. in million)	Diluted EPS for Financial Year 2022 (in Rs.)	P/E
Concord Biotech Limited	7,129.33	16.72	-
Divi’s Laboratories Limited	89,598.30	111.52	35.31
Suven Pharmaceuticals Limited	13,202.22	17.83	26.95
Laurus Labs Limited	49,355.70	15.35	35.90
Shilpa Medicare Limited	11,455.23	7.26	56.44

 

IPO's Valuations

The EPS of the upcoming IPO of Concord Biotech Limited  is Rs.22.95, and the PE ratio is 32.29. If we calculate the given data for IPO valuation, the share price of Concord Biotech Limited could be around Rs.741.

 

Dividend Policy

The company has a history of paying dividends in the past, distributing 60% (FY21), 741.50% (FY22), and 512% (FY23) of dividends to its shareholders. For the current fiscal year FY24, the company has already paid an interim dividend of 683%. Furthermore, the company plans to maintain its dividend policy and continue paying dividends in the future.

 

IPO's Strengths

• Well-established presence throughout the complex fermentation value chain.
• Global leadership in immunosuppressant APIs and a diverse range of complex fermentation-based APIs across various therapeutic areas.
• Equipped with scaled manufacturing facilities, maintaining a consistent regulatory compliance track record, and backed by robust R&D capabilities.
• Possesses a diversified global customer base, maintaining long-standing relationships with key customers.
• Led by experienced Promoters and management team, with support from prominent investors.
• Demonstrates a strong financial track record, characterized by rapid growth, consistent profitability, healthy cash flows, and impressive shareholder returns.

 

IPO Weaknesses

• The company relies on a limited number of key customers, which account for a significant portion of its revenues.
• The company is required to comply with extensive government regulations.
• The company must ensure the maintenance or renewal of statutory and regulatory licenses, permits, and approvals.
• The company is involved in ongoing legal proceedings.
• The company faces complex management, legal, tax, and economic risks due to its international operations.
• The company operates in a highly competitive pharmaceutical industry.
• Non-compliance with and changes in environmental, health and safety, and labor laws and other applicable regulations may have adverse effects on the business.

 

 

IPO GMP Today

As of August 8, 2023, the Concord Biotech IPO GMP is Rs.160.

 

Conclusion

The Indian biopharma company's IPO, supported by Rekha Jhunjhunwala, consists solely of a pure offer-for-sale by Helix Investment Holdings Pte Ltd. The company boasts a diverse range of niche products and holds a prominent position as a leading developer and manufacturer of fermentation-based APIs in immunosuppressants and oncology.

While the company experienced a setback in its bottom line during FY22, it demonstrated growth in its top line over the last three fiscal years. Considering the financial performance in FY23, the IPO appears to be fully priced. Investors are advised to conduct a thorough analysis for the best possible outcomes before applying for the IPO.

 

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To Read the Prospectus of the Company Click Here to Download the DRHP

 

 

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