Analysts advised investors to subscribe to the issue given its complex product portfolio, presence in niche space, strong client relationship and high entry barriers.
“The issue is valued at 32x P/E in line with the peer group’s average of 32x. We believe CBL could benefit from the industry tailwinds given its PLI approval in place. Hence, we recommend a Subscribe,” said Motilal Oswal.
The company is one of the leading global manufacturers of select fermentation-based APIs (F-APIs) across immunosuppressants and oncology with a market share of over 20% by volume in 2022.
It is present across the fermentation value chain, and supplies to over 70 countries, including regulated markets, such as US, Europe and Japan, and India.
As of FY23, the company had 23 APIs (89% of revenue), which it aims to increase further, especially in anti-infective/oncology segments.
The IPO is completely an offer for sale of 2.09 crore equity shares, aggregating up to Rs 1,551 crore. There is no fresh equity issue in the IPO.Under the OFS, Helix Investment Holdings Pte Ltd, backed by private equity firm Quadria Capital, will offload 2.09 crore equity shares.
The company has fixed the price band at Rs 705-741 per share for its public offer. Investors can bid for a minimum of 20 shares and in multiples thereafter.
Anand Rathi said the company has established a presence across the complex fermentation value chain with global leadership in immunosuppressant APIs along with a wide spectrum of complex fermentation-based APIs across multiple therapeutic areas.
The brokerage believes the IPO is fairly priced and recommended a subscribe for the long term.
Concord recorded an 18% CAGR in revenue over FY21-23 with the EBITDA margin of 40%. Its return ratios are healthy with RoE/RoCE of 20% and 19% and it generated free cash flow over the last two years with FCF/EBITDA at 29%.
Kotak Mahindra Capital, Jefferies India and Citigroup are the book-running lead managers and Link Intime India is the registrar for the IPO.
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