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Shares of Akums Drugs and Pharmaceuticals debuted at the bourses on a strong note on Tuesday. Against the IPO price of ₹679, the stock opened at ₹725, a premium of 6.8 per cent, and rose further to a high of ₹797.50.
The pharma major closed at ₹796.25, a gain of 17.23 per cent over the IPO price. On the BSE, the stock closed 17.3 per cent higher at ₹796.35.
Earlier, the initial public offering of Akums Drugs saw a robust response from all category investors and was subscribed 63.56 times.
The ₹1,856.74-crore IPO was a mix of fresh issue worth ₹680 crore and an offer-for-sale of ₹1,176.74 crore by the existing shareholders. While retail investors portion was subscribed 21.30 times, HNIs window received bids for 42.21 times; and employees by 4.27 times. The QIB was was subscribed 90 times. A discount of ₹64 a share was offered to eligible employees.
Long-term investors
Shivani Nyati, Head of Wealth, Swastika Investmart Ltd, said the company’s strong fundamentals and market position offer potential for long-term growth, but investors should carefully assess the risks and market volatility. “Investors with a long-term view may hold their position by keeping a stop loss at its issue price,” she said.
Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said: The anticipated growth in the Indian CDMO market, along with Akums expanding global footprint and strategic move into API manufacturing, enhances its long-term prospects. “Hence, we recommend allotted investors to “HOLD” Akums Drugs for a long-term perspective,” he said.
Utility of funds
Akums Drugs and Pharmaceuticals had raised ₹828.8 crore from several anchor investors as part of the IPO. The company proposes to utilise net proceeds from the fresh issue towards repayment/prepayment of indebtedness of the company; repayment/prepayment of indebtedness of its subsidiaries namely, Maxcure Nutravedics Ltd and Pure and Cure Healthcare Pvt Ltd; funding incremental working capital requirements of the company; pursuing inorganic growth initiatives through acquisitions; and general corporate purposes.
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