Concord Biotech Limited IPO

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India ranks top globally in terms of new Initial Public Offerings (IPOs) launched as of July 2023. As the broader market continues to show bullish sentiments in Q2 2023, another new IPO- Concord Biotech Limited IPO, an Ahmedabad-based pharmaceutical company, is set to launch.

If you find the DRHP tough to read and are a new investor, we have got you covered. Keep reading to know the essential facts about Concord Biotech IPO to make an informed decision.

IPO details

Concord Biotech Public Limited will launch its IPO on August 4, Friday with its closing date on August 8, Tuesday. The company has set an IPO price band of Rs. 705 to Rs. 741 per equity share. The face value of each share is fixed at Rs. 1. The lot size of their shares is 20 equity shares per lot.

Furthermore, the allocation of IPO shares of Concord Biotech to anchor investors is going to take place on 3 August 2023, Thursday. The upper band of the issue offer price is Rs. 1550 crore while the worth of the company is Rs. 7752 crore.

Keep reading for a detailed overview of Concord Biotech to decide on your investment strategy.

IPO Details

IPO Open Date August 4, 2023 
IPO Close Date August 8, 2023 
Face Value Rs. 1 per share  
Price Band Rs. 705 to Rs. 741 per share  
Lot Size 20 shares  
Total Issue Size Aggregates up to Rs. 1,551 crores  
Fresh Issue Aggregates up to Rs. 0 crore  
Offer for Sale Aggregates up to Rs. 1,551 crores  
Employee Discount Rs. 70 per share  
Issue Type Book Built Issue IPO  
Listing at NSE and BSE  

Apply for the Concord Biotech Limited IPO via Bajaj Broking.

About the company

Concord was established in the year 2000 by Sudhir Vaid as a single company. It is an India-based biopharmaceutical company that specialises in the research and development and manufacturing of active pharmaceutical ingredients (APIs).

Today, Concord Biotech Limited has a diverse range of products; over 30 in its niche product line segment. It is also the first company in India and the second in the world to generate the anti-immuno suppressant Tacrolimus which is approved by FDA.

In 2016, Quadria Capital acquired 20% of Concord’s stakes while Rakesh Jhunjhunwala’s Rare Enterprise held 24% of their stakes. According to F&S Report, Concord is an Ahmedabad-based Biotechnology that ranks among the top producers and developers of fermentation-based APIs.

IPO tentative timetable

The IPO Subscription for Concord Biotech Limited opens on Friday, 4 August 2023 and closes on Tuesday, 8 August 2023. The company will allocate IPO shares to anchor investors on a day before its opening date to retail investors. This will happen on Thursday, 3 August 2023.

The tentative date for allotment of shares is set on Friday, 11 August 2023. Following this, the company plans to start the refunding process on 14 August 2023. After allotment, you will receive the IPO shares in your Demat account on Thursday, 17 August 2023. Finally, Concord Biotech Limited will list these IPO shares on NSE and BSE on 18 August 2023.

IPO lot size

To buy IPO shares of Concord Biotech Limited, you would have to pay at least Rs. 14,820 as the price for a single lot of 20 shares. Other relevant details of the IPO lot sizes are given below. 

ApplicationLotsSharesAmount
Retail (min)120Rs. 14,820
Retail (max)13260Rs. 1.92,660
S-HNI (min)14280Rs. 2,07,480
S-HNI (max)671340Rs. 9,92,940
B-HNI(min)681370Rs. 10,07,760

Company financials

The table below lists the important financial details about Concord Biotech Limited that you must know before investing in Concord Biotech Limited’s IPO. The values in the following table are given in Rs. millions.

Financials as of31st March 202231st March 202131st March 2020
Total AssetsRs. 13,127.97Rs. 11,825.46Rs. 9,405.15
Total LiabilitiesRs. 13,127.95Rs. 11,825.46Rs. 9,405.15
Total RevenueRs. 7,363.49Rs. 6,307.50Rs. 5435.91
Total ExpenseRs. 4951.93Rs. 3175.81Rs. 3301.03
Profit after TaxRs. 1749.29Rs. 2348.87Rs. 1691.12
EBITDARs. 2696.36Rs. 3271.02Rs. 2043.20

Strength

The points below highlight the strengths of Concord Biotech Limited that make it a distinguished company among its competitors. These strengths will give you an idea about the company’s future and make an informed investment.

  • Cost efficient

Concord Biotech Limited offers a low-cost price structure to generic players in the market. This would bring Concord to the limelight wherein there is a rising demand from pharmaceuticals to lower drug prices.

  • Manufactures complex products

Producing new drugs involves complex procedures within a short time and is expensive. However, Concord Biotech Limited dominates the industry with the power and efficiency to handle the manufacturing of complex products and distribute them across geography.

  • Market leader across complicated fermentation supply chain

Since 2001, Concord Biotech Limited has established its name in manufacturing complex products owing to its technical expertise in the fermentation process. This process is quite challenging as it involves working with microbial strain and culture. One needs to be very careful while conducting the fermentation procedure as a small change can cause a huge variance in the final formula.

As of 31 March 2022, Concord Biotech has manufactured 22 APIs based on fermentation across various fields. This includes oncology, anti-bacterial, anti-fungal, immunosuppressant and many others. Adding to this fermentation capability, the company also integrated semi-synthetic APIs with in-house fermentation-based APIs.

  • Growing infrastructure, consistent track record and strong R&D

Concord Biotech Limited has three manufacturing units in Gujarat and 41 manufacturing blocks where different classes of APIs are generated. This provides flexible plant configuration. These are present in Dholka and Limbasi.

Overseas regulators inspect these manufacturing units periodically. The manufacturing facility of Dholka received its first inspection by USFDA in 2005 whereas the one in Valthera received its first inspection in 2017. The production unit in Valthera can generate 522.64 million units annually.

  • Global supplier

According to the F&S report, Concord Biotech Limited holds a market share of 20% by volume in 2022.  The company delivers these products to 70 countries which include regulated markets in the USA, Japan, India and some other European countries.

They are also trying to penetrate and grow their business in countries like Paraguay, Singapore, Nepal, Mexico, Thailand, Ecuador, Kenya, and Indonesia.

  • Rapid financial growth  with substantial cash flow and good returns from shareholders

For the previous three financial years, the total earning of Concord Biotech Limited from operations alone has been reported to be  Rs.5,123.29 million for 2020, Rs.6,169.43 million for 2021 and Rs. 7,129.33 million for 2022. This represents a CAGR of 17.96%.

This reflects an evident growth in the company which is a good sign for investors to consider investing in the upcoming IPO of Concord Biotech Limited.

Risk involved

Besides the above strengths, you must also know about the risks and challenges that this company faces. This will help you stay neutral and make an informed decision based on facts over emotions.

  • Delay in the supply of raw materials

To receive the raw materials, Concord Biotech Limited depends on third-party suppliers. For FY 2020, 2021 and 2022, they have bought raw materials for Rs. 840.59 million, Rs. 710.33 million and Rs. 893.60 million from three prime suppliers.

Various factors from third parties and perpetual delays in production can disrupt the supply of raw materials. For instance, the export and the global economy faced a crisis owing to the geopolitical conflict between Russia and Ukraine. This led to European Union, UK and US governments’ sanctions on certain products coming from Russia. Situations like these can negatively impact trade between countries and also the regional and global financial markets.

  • Slowdown or shutdown of the R&D and manufacturing sector can adversely affect the production

All units of Concord Biotech Limited are situated in Gujarat, India. Any failure of equipment, accident or shortage of electricity or water supply that happens locally can disrupt production. Unavoidable circumstances like political instability or the spreading of communicable diseases among employees can also negatively impact production.

Major manufacturing facilities are located within units in Dholka, some of which the company is trying to shift to the Limbasi facility. This helps in maintaining a backup in case one of the facilities slows down.

Similarly, any slowdown of work in the research and development section can also negatively impact production. This may result in the company’s inability to get their hands on the required materials in a smooth and timely manner.

  • Limited clientele who are their key customers

Concord Biotech Limited has a limited number of significant customers who help them generate good revenue. Till 31 March 2022, the company enrolled 200 customers across 70 nations. The revenues for the financial years 2020, 2021, and 2022 from the top 10 customers have been 60.20%, 48.24% and 47.65%, respectively.

This dependence on a small clientele exposes this company to risks of declining demand in the long run. This can arise due to several unpredictable reasons like unfavourable market conditions, disputes regarding quality or timeliness of delivery or price negotiations.

The company cannot promise to increase revenue from such customers; however, they are looking out for ways to grow their customer base. This would help them diversify their risks of losing key customers.

Summary

Concord Biotech Limited’s impressive portfolio ranks it as one of the best companies in the pharmaceutical sector. Keeping in mind their strength, weaknesses, opportunities and threats, the company seeks to establish its business to new heights.

As an investor, you should consider analysing the company’s goals, strengths and weaknesses to make an informed decision. This will let you know whether the company’s plans align with your financial goals and let you decide whether to invest in the upcoming Concord Biotech IPO.

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