Gland Pharma IPO - Subscribe Says Research Analysts

Published on Monday, November 9, 2020 by Team

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Gland Pharma IPO - Subscribe Says Research Analysts

Gland Pharma, a Hyderabad based leading pharmaceutical company in India, is coming up with an Initial Public Offer of ₹6,479.55 Cr. The public issue opens from Nov 9, 2020, to Nov 11, 2020. Below are the reviews by top research analysts and brokerage houses.

ICICI Direct (Subscribe)

  • It is a niche player in sterile injectables, oncology, and ophthalmic solutions with a focus on first-to-file, 505(b)(2) filings, and NCE- 1s.
  • Along with its partners, Gland has 267 ANDA filings (101 owned) in the US as of Q1FY21, of which 215 were approved.
  • The company has seven manufacturing facilities in India, comprising four formulations facilities with 22 production lines and three API facilities.
  • In 2017, Shanghai-based Fosun Pharma had acquired a 74% stake in the company for US$1.09 billion.

Capital Market (May Subscribe)

  • Solid track record in a niche segment, with relatively high entry barriers, and unique business model.
  • At the higher price band of Rs 1500, the offer is made at around 31.7 times its FY 2020 EPS of Rs 47.4 on a post-issue equity share capital of Rs 16.33 crore of the face value of Rs 1 each. There is no comparable listed player with a mirror business.
  • Low-risk low return or Moderate risk, moderate/high return.

Axis Bank (None)

  • Incorporated on March 20, 1978, It is one of the fastest-growing generic injectables-focused companies by revenue in the United States from 2014 to 2019.
  • Sells its products primarily under a B2B model in over 60 countries.
  • Gland Pharma along with its partners had 267 ANDA filings in the United States, of which 215 were approved and 52 were pending approval.

GEPL Capital (Subscribe)

  • The offer is priced at a P/E of ~18.52x on annualized EPS of the quarter ended June 2020.
  • The company has a focus on complex injectables which has high entry barriers and strategic partnerships to penetrate new markets like China which can prove to be a lucrative opportunity for the company.
  • With a strong product pipeline and more complex products under development, focus on B2B expansion and licensing, and opportunities to enter more therapy areas, the offer looks attractive.
  • We recommend a SUBSCRIBE to the offer.

Kotak Securities (None)

  • Extensive and vertically integrated injectables manufacturing capabilities.
  • Diversified B2B-led model across markets, complemented by a targeted B2C model in India.
  • Extensive portfolio of complex products supported by internal R&D and regulatory capabilities.
  • Track record of growth and profitability from a diversified revenue base with healthy cash flows.
  • Professional and experienced management team with significant expertise in the pharmaceutical industry.

K R Choksey (Subscribe)

  • Fastest growing generic injectable company in the US
  • The company doesn't have any directly listed peers in the domestic market.
  • The company has a unique business model of B2B nature, aided by vertical integration & R&D expertise.
  • The company has expansion plans in terms of geographical & capacity expansion & is open to inorganic opportunities as well.
  • It also has a strong balance sheet with negligible debt & strong cashflows.
  • At the upper band of the issue price, Gland Pharma to have a PE multiple of 25.7x on LTM earnings, which is at a steep discount to its listed global peers like Lonza (53.3x), Catalant (64.6x), Recipharm (51.5x).

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