Concord Biotech IPO GMP (Grey Market Premium)

Concord Biotech IPO worth ₹1,551 crore comprises entirely of an offer for sale and has no fresh issue component to it. The entire offer for sale is by Helix Investment Holdings Pte Ltd. Here it must be noted that while the fresh issue component infuses fresh funds into the company, it also is EPS dilutive and equity dilutive. On the other hand, the offer for sale (OFS), as in the case of Concord Biotech Ltd, is just a transfer of shares so there is no fresh infusion of funds, but it also does not dilute the equity. The issue has been priced in the band of ₹705 to ₹741 per share and the IPO allotment price will be discovered post the book building of shares being completed during the IPO process. For our analysis, the upper end of the price band is assumed to be the reference price.

About the Concord Biotech IPO

Let us now look at the details Concord Biotech IPO issue. The offer for sale of the company IPO will entail the issue of 2,09,25,652 shares (2.09 crore shares) which at the upper end of the price band of ₹741 would result in an offer for sale issue size of ₹1,551 crore. There is no fresh issue component in the IPO of Concord Biotech Ltd so the OFS of Rs1,551 crore is also the overall size of the IPO. The company has Sudhir Vaid and Manju Vaid as its main promoters, while RARE Enterprises (the Rakesh Jhunjhunwala investment company) holds 24% in Concord Biotech. However, Helix is the only selling shareholder and they will be reducing their stake in Concord Biotech to Nil post the OFS.

The issue opens for subscription on 04th August 2023 and closes for subscription on 08th August 2023 (both days inclusive). The basis of allotment will be finalized on 11th August 2023 and the refunds will be initiated on 14th August 2023. In addition, the demat credits are expected to happen on 17th August 2023 and the stock is scheduled to list on 18th August 2023 on the NSE and the BSE. There will be no fresh funds coming in through the IPO route but the sale of shares by Helix Investment Holdings Pte Ltd will help to increase the public float of the stock as it constitutes nearly 20% of the paid up capital of the company. This will be helpful in the post listing liquidity on the stock.

A brief on Concord Biotech IPO GMP

The grey market price (GMP) trading normally starts about 4-5 days prior to IPO opening and continues till the listing date. In the case of Concord Biotech Ltd, we already have GMP data for the last 3 days, which should give a reasonable picture of the likely listing performance. There are 2 factors that impact the GMP. Firstly, the market conditions have a deep impact on the GMP, which includes the levels of the Nifty and Sensex as well as the general IPO market and macro conditions. Secondly, the extent of subscription for the IPO across the retail and the QIB segments also has a deep impact on the GMP as it is indicative of investor interest in the stock. Generally, strong QIB subscription is a trigger for a spike in GMP.

There is one small point to remember here. The GMP is not an official price point, just a popular informal price point. However, in most cases, it has been observed to be a good informal gauge of demand and supply for the IPO. Hence it does give a broad idea of how the listing is likely to be and how the post-listing performance of the stock would be.

Concord Biotech IPO GMP (Grey Market Premium)

GMP tends to be a good mirror of the real stock story. More than the actual price, it is the GMP trend over time that gives insights about which direction the wind is blowing. Here is a quick GMP summary for Concord Biotech IPO for which the data is available.