Preventive healthcare and disease diagnostics company Thyrocare Technologies Ltd, whose public issue late last month received a stellar response from investors, saw its shares rise as much as 48.43% on debut on Monday.
The stock opened at Rs.662 against its offer price of Rs.446 a share. At 12.40pm, Thyrocare shares were quoting at Rs.615.30 apiece, up 38%. The scrip touched a high and a low of Rs.662 and Rs.606, respectively.
The opening gains seen in the case of Thyrocare are the best since the IPO of Sharda Cropchem in November 2014 which saw its shares jump 63% on opening day.
Post the stock market listing, Thyrocare has a market capitalisation of Rs.3,556.50 crore.
Thyrocare had fixed the initial public offering (IPO) price atRs.420-446 per share. The Navi Mumbai-based company allotted shares at the upper end of the price band.
In the grey market on Friday, Thyrocare’s shares were in demand at a premium of Rs.240-260 per share above its issue price band, reflecting strong interest in the stock, two dealers said, on the condition of anonymity. The grey market is an over-the-counter market where IPO shares are bought and sold before a company officially lists on the stock exchange. It gives a broad indication of the appetite for a public issue.
Analysts have been positive on the company.
In a note on 27 April, Kotak Securities Ltd’s pharma analyst Meeta Shetty said that the cash-adjusted returns on equity and returns on capital employed of about 25-30%, zero debt and about 23% cumulative annualised growth are key positives for the stock.
“The cash rich business, large untapped (unorganised) markets, ample growth avenues through different offerings and scarcity premium has led higher valuation for this industry in recent times (Dr. Lal PathLabs trading at P/E 55x and Carlyle – Metropolis deal at ~5.0x P/S). However, the company (Thyrocare) will have to sustain higher growth in revenues and margins to continue trading at the premium valuations,” Shetty added.
Thyrocare’s IPO received demand for 75 times the number of shares it offered. Retail investors and high net-worth individual investors bid for 8.45 times and 225.3 times the number of shares reserved for them in the IPO, respectively, data from stock exchanges showed.
Religare Securities Ltd’s analyst Ajay Kumar Srivastava and Swati Saxena said that Thyrocare would see impressive growth in the years to come, aided by healthy financials.
“Thyrocare is gearing up for growth in business and volumes of samples processed for which it intends to expand the network of RPLs to more cities across India,” Religare analysts said in a note.