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Indegene IPO opens for subscription: Should you bid?
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Analysts advised investors to ‘Subscribe’ to Indegene IPO, saying the company is well-positioned to benefit from the expected growth in life sciences operations expenditure. Moreover, it has a proven track record of creating value through strategic acquisitions.
The initial public offering (IPO) of Indegene Ltd., which is a provider of digital-led commercialisation services for the global life sciences industry, will open for subscription on May 6. The three-day public bidding will close on May 8. Through the IPO, the company aims to raise about ₹1,842 crore.
Indegene IPO review
Analysts advised investors to ‘Subscribe’ to the issue, considering the company is well-positioned to benefit from the expected growth in life sciences operations expenditure. Moreover, it has a proven track record of creating value through strategic acquisitions.
BP Wealth: Subscribe
“The issue is valued at a P/E (price-earnings) of 31.3 times on the upper price band based on FY24 earnings estimates, which we feel is fairly valued,” said brokerage BP Wealth while suggesting a ‘Subscribe’ rating to the issue.
Anand Rathi: Subscribe
With a global footprint and delivery centers strategically located around the world, the company offers support to clients on a global scale. This enables flexible collaboration, efficient project execution, and timely delivery of services across different regions, said Anand Rathi in a note.
The brokerage believes that the valuation of the company is fairly priced. “At the upper price band company is valued at P/E of 40.6 times with a market cap of ₹10,814 crore post issue of equity shares,” it said with a ‘Subscribe’ tag to the IPO.
Reliance Securities: Subscribe
Reliance Securities has recommended a ‘Subscribe’ rating to the issue, saying Indegene is one of the innovative companies in the life sciences industry with more than two decades of experience and has healthcare domain expertise and fit-for-purpose technology with a portfolio of solutions covering all aspects of commercial, medical, regulatory, and R&D operations of life sciences companies.
Comparison with listed industry peers
There are no listed companies in India and globally that are of comparable size, from the same industry and with similar business model as that of the company. Accordingly, the company has not provided an industry comparison in relation to the company.
Indegene IPO price band
The Bengaluru-based company has fixed a price band of ₹430-452 per share for its maiden public offer. Investors can bid for a minimum of 33 shares in one lot and in multiples thereafter.
Indegene IPO GMP
Shares of Indegene Ltd. were commanding a premium of nearly 58% in the grey market today.
However, it is important to note that grey market premiums are just an indicator of how the company’s shares are stacked up in the unlisted market and are subject to change rapidly.
Indegene IPO other details
The IPO includes a fresh issue of equity shares worth up to ₹760 crore and an offer-for-sale (OFS) of up to 2.34 crore equity shares aggregating ₹1,082 crore, at the upper end of the price band, by selling shareholders.
The OFS would see sale of shares by existing investors CA Dawn Investments, a Carlyle group entity, Vida Trustees in its capacity as partner of Group Life Spring, Brighton Park Capital’s entities BPC Genesis Fund I SPV Ltd, and BPC Genesis Fund I-A SPV Ltd, and individual investors Manish Gupta, Rajesh Bhaskaran Nair, and Anita Nair.
Currently, Nadathur Fareast Pte Ltd is the biggest shareholder in Indegene with a 23.64% stake. CA Dawn Investments has a 20.42% stake, and Brighton Park Capital owns a 12% stake in the company.
Indegene had raised $200 million from Carlyle Group and Brighton Park Capital in February 2021.
Indegene IPO objective
The funds raised from the fresh issue would be utilised to pay debt, funding capital expenditure requirements, payment of deferred consideration for one of its past acquisitions, funding inorganic growth and general corporate purposes.
Indegene IPO BRLM
Kotak Mahindra Capital, Citigroup Global Markets India, J P Morgan India, Nomura Financial Advisory and Securities (India) are the book-running lead managers to the issue.
Indegene IPO allotment, listing date
Basis of allotment will be decided on May 9 and initiation of refunds will begin the next day. Indegene shares are expected to list on exchanges on May 13.
Business overview
Founded in 1998, Indegene offers solutions that help enable biopharmaceutical, emerging biotech and medical devices companies to develop products, launch them in the market, and drive sales throughout their life cycle.
Financials
For the period ended December 2023, the firm clocked revenue from operations of ₹1,969 crore and posted a profit after tax of ₹241 crore.
Also Watch | In an interview with CNBC-TV18, Manish Gupta, Chairman, ED & CEO and Suhas Prabhu, CFO of Indegene said that the EBITDA Margin has been stable for a long time, adding that ₹391 crore will go towards making the company debt-free.
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