India: Alkem Labs, Dr Lal Pathlabs IPOs fully subscribed on Day 2

Visual from Alkem Labs website

Drug maker Alkem Laboratories Ltd and diagnostics chain Dr Lal Pathlabs, which launched their initial public offerings (IPO) on Tuesday, saw their share sales subscribed fully at the end of the second day of their offerings, according to data from stock exchanges.

At 5pm on Wednesday, the Alkem Labs IPO was subscribed 1.41 times and the Lal Pathlabs IPO was subscribed 2.64 times, data showed. Both the share sales close on 10 December.

Both share sales have seen strong demand from investors even though secondary markets have been volatile throughout this week. On Wednesday, the benchmark Sensex shed 2.35% to 25,036.05 points.

The IPO of Alkem Laboratories, the larger of the two issues, saw a subscription of 2.33 times in the institutional investor category, while the high-net-worth individual (HNI) and retail investor categories saw subscriptions of 64% and 1.41 times, respectively.

Alkem is looking to raise almost Rs.1,350 crore through its initial share sale. It has fixed a price band of Rs.1,020-1,050 per share. Promoters of the firm are looking to sell 10.75% of their stake as part of the issue.

According to pharma market researcher IMS, Alkem is the fifth-largest drug maker in India. The firm is engaged in the development, manufacture and sale of pharmaceutical and neutraceutical products.

In 2014-15, Alkem’s domestic and international operations accounted for 74.7% and 25.3%, respectively, of the net revenue from operations. In 2014-15, it reported a revenue of Rs.3,177.3 crore, up 19% from a year ago. Net profit for the year was at Rs.437 crore as against Rs.440.2 crore the previous year.

Dr Lal Pathlabs’ IPO, which was overall subscribed 2.64 times, saw the institutional investors’ segment being subscribed 6.12 times, while the HNI and retail investor categories saw subscription of 57% and 1.55 times, respectively.

The diagnostics firm is looking to raise Rs.632 crore through its IPO. The firm has fixed a price band of Rs.540-550 per share for the share sale.

On Monday, the firm allocated shares worth Rs.191.4 crore to institutional investors, as part of its anchor book allocation.

The anchor book is that portion of the IPO bankers can allot to institutional investors on a discretionary basis. Anchor-book subscription opens a day before the launch of an IPO and acts as an indicator of institutional investor interest.

Foreign institutional investors including Fidelity, T Rowe Price, JPMorgan, Morgan Stanley and Merrill Lynch bought shares as part of the anchor subscription. Domestic institutions that subscribed to the anchor book include mutual funds such as Birla Sun Life, SBI, Kotak Mahindra and ICICI Prudential.

Westbridge Capital and TA Associates, private equity investors in the firm, are selling part of their holdings in the firm through the IPO.

The firm, which was founded in 1949, reported a revenue of Rs.662.5 crore in 2014-15 and a profit of Rs.95 crore. The company’s revenue has grown at a compounded annual growth rate of 20.7% over the past three financial years. The diagnostics chain has a network of 172 laboratories and 1,554 collection centres across the country.

So far this year, 18 firms have raised around Rs.11,000 crore through the IPO route, according to data from Prime Database, a primary market tracker.

Also Read: India: Dr Lal PathLabs, Alkem Labs IPOs launch on higher side of price band

India: Dr Lal Pathlabs raises $28m from anchor investors ahead of IPO

India: Three IPO launches to help raise over $377m in December

This article was first published on Livemint.com

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.