Muted Listing: Akums Drugs & Pharma Makes Tepid Debut On Exchanges At 7% Premium From IPO Price

Akums Drugs and Pharmaceuticals Ltd made a tepid debut on the stock exchanges today, with its shares opening at Rs 725 each on both the NSE and BSE. This represents a 6.8% premium over the issue price of Rs 679. Despite this positive start, the stock's performance fell short of market expectations, which had forecast an opening range between Rs 780 and Rs 800.

The company's initial public offering (IPO) closed on August 1 after opening on July 30. The response to the IPO was robust, with the overall subscription rate reaching 63.44 times the shares available, according to data from the Bombay Stock Exchange (BSE). The Qualified Institutional Buyers (QIBs) segment was the most enthusiastic, with a subscription rate of 90.09 times, indicating strong institutional interest. Non-institutional investors also showed interest, subscribing to their allocated shares 42.10 times, while retail investors subscribed 20.80 times. The employee segment, which had a smaller allocation, was booked 4.14 times.

The IPO was priced within a band of Rs 646 to Rs 679 per share. Prior to the public subscription period, Akums had secured Rs 829 crore from anchor investors, which provided a boost for the offering. The total value of the IPO amounted to Rs 1,857 crore, including a fresh issue of Rs 680 crore and an offer-for-sale (OFS) of 17,330,435 equity shares by promoters and other investors. The promoters, Sanjeev and Sandeep Jain, each sold 15.12 lakh shares in the OFS, while Ruby QC Investment Holdings Pte Ltd. offered 1.43 crore shares.

The funds raised through the IPO are earmarked for multiple purposes. A portion will be used to pay down the company's debt and that of its subsidiaries, including Pure and Cure Healthcare, Maxcure Nutravedics, and Pure. Additionally, the IPO proceeds will support Akums' plans for inorganic growth and address its increasing working capital needs.

Founded in 2004, Akums Drugs has grown into a leading contract development and production organization (CDO) in the pharmaceutical sector. The company offers a diverse range of pharmaceutical products and services both within India and internationally, establishing a strong footprint in the global market.

The grey market premium (GMP) for Akums Drugs shares was reported at +43 today, indicating that the shares were trading at a premium of Rs 43 above the issue price in the unofficial market. This premium suggests that the estimated listing price could be around Rs 722 per share, reflecting a potential gain of 6.33% over the issue price.

The IPO was managed by a consortium of lead managers, including 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.

Although Akums Drugs' stock made a positive start, the initial performance was more subdued than many analysts had anticipated. The tepid debut highlights a cautious yet optimistic outlook from investors, who have shown confidence in the company's future but are also closely monitoring its market performance.