Could India-China Tensions be Behind Gland Pharma’s Tepid IPO Response?

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Could India-China Tensions be Behind Gland Pharma’s Tepid IPO Response?
Credit: © Reuters.

By Aditya Raghunath

Investing.com -- India’s largest pharma IPO (initial public offering) received a very tepid response on day 1 as retail investors only subscribed 1.4% of the total portion set aside for them. The Rs. 6,480 crore IPO of Hyderabad-based Gland Pharma, saw a total subscription of only 0.18% on day 1 of its bidding.

Gland Pharma is a B2B company that operates in the complex injectables space and sells to over 60 countries across the US, Europe, Canada, Australia, India, and the rest of the world, while the US accounts for around 62% of its revenues.

The complex injectables space is not easy and has high entry barriers. Further, Gland Pharma has 267 abbreviated new drug application (ANDA) filings that include 191 ANDA filings for sterile injectables, 50 for oncology, and 26 for ophthalmics. Out of these, 215 have been approved.

Despite these figures, the response towards the IPO hasn’t been enthusiastic. Gland Pharma is owned by Chinese firms Fosun Singapore and Shanghai Shanghai Fosun Pharmaceutical Group Co Ltd (SS: 600196 ) who have a 74% stake in the company. The company also imports 25%-30% of its raw material from China. Given that relations between India and China are not the best right now, retail investors might not be overly interested in subscribing to the IPO.

Another reason for the low interest could be that the offer price of Rs. Rs 1,490-1,500 is seen as too expensive. The issue will close on November 11. Does this mean the stock will trade significantly lower when it gets listed later this month?

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  • Mahesh Hal @Mahesh Hal
    SEBI regulator would have advised Company on pricing of the issue. If IPO with reasonable premium would have been planned, nobody would have had any objection, But collecting such huge premium by Fosun is highly disturbing. (when even Chinese Regulator can block its native Ant's IPO listing)
    Like 1
  • jay patel @jay patel
    don't apply expensive one
    Like 0
  • Sid Chau @Sid Chau
    Price is too high and also the Chinese investment. After the recent border activities by China this IPO is set for failure. Would love too see this listed below 500 on the NSE
    Like 0
  • Sid Chau @Sid Chau
    Price is too high and also the Chinese investment. After the recent border activities by China this IPO is set for failure. Would love too see this listed below 500 on the NSE
    Like 1
  • Rajeev Kumar @Rajeev Kumar
    As Indians, we should ensure this IPO fails.
    Like 3
  • Sekhar Talapatra @Sekhar Talapatra
    We hate China
    Like 6
    • Sachin Agrawal @Sachin Agrawal
      @Sekhar Talapatra Hope you know Xiaomi was largest seller of phones last quarter, and how much money Indians gave away to Chinese companies in Amazon and Flipkart sales.
      Like 1
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  • Rajiv Tarafdar @Rajiv Tarafdar
    pricing is very highseco dly offcourse idia china instability and face off would have negative effects on this stock, why to invedt in thismake in india but not with china partner there has been growing negative sentiment after the what china has given to the world
    Like 0
  • Rajiv Tarafdar @Rajiv Tarafdar
    pricing is very highseco dly offcourse idia china instability and face off would have negative effects on this stock, why to invedt in thismake in india but not with china partner there has been growing negative sentiment after the what china has given to the world
    Like 0
  • MCX Sumangal @MCX Sumangal
    China is our enemy. We hate china.
    Like 4
  • shnt das @shnt das
    Why can not be the Antagonism Indians have for China that they do not want to buy IPO of a chinese owned company!!
    Like 1
  • Ashish Verma @Ashish Verma
    overpriced face value of 1 and share value 1500 what is this
    Like 2
  • Ashish Verma @Ashish Verma
    overpriced face value of 1 and share value 1500 what is this
    Like 0
  • Vivek Sreekanta @Vivek Sreekanta
    Indian Investors are not intrested to put thir money in a chines company
    Like 4
  • vikram vasudeva @vikram vasudeva
    it's overpriced. rs.1000 is par price
    Like 0
  • vikram vasudeva @vikram vasudeva
    it's overpriced. rs.1000 is par price
    Like 0
  • vikram vasudeva @vikram vasudeva
    it's overpriced. rs.1000 is par price
    Like 0

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