Akums Drugs IPO

Akums Drugs IPO Day 2: Should You Subscribe? Check GMP, Key Dates, Review & Subscription Status

The Akums Drugs & Pharmaceuticals IPO has caught the attention of many investors as it enters its second day. With a sizeable issue and strong initial interest, this article will explore whether you should subscribe to the IPO by reviewing its Grey Market Premium (GMP), key dates, subscription status, and expert opinions.

1. IPO Overview

1.1 Akums Drugs & Pharmaceuticals: A Brief Introduction

Founded in 2004, Akums Drugs & Pharmaceuticals is a leading pharmaceutical contract development and manufacturing organization (CDMO). The company specializes in a wide range of pharmaceutical products and services, catering to both domestic and international markets.

1.2 IPO Details

• Opening Date: July 30
• Closing Date: August 1
• Issue Size: ₹1,857 crore
  • Fresh Issue: ₹680 crore
  • Offer-for-Sale (OFS): 17,330,435 equity shares
• Price Band: ₹646 – ₹679 per share
• Minimum Bid: 22 shares and multiples thereof

2. Key Dates

2.1 IPO Open Date

The IPO opened on July 30, 2024, allowing investors to start placing their bids.

2.2 IPO Close Date

The IPO will close on August 1, 2024. Ensure to submit your bids before this deadline.

2.3 Allotment Date

The allotment date  will be announced after the IPO closes, where the final allocation of shares will be determined.

2.4 Listing Date

Shares are expected to be listed on the stock exchange on [Tuesday, August 6, 2024], where trading will commence.

3. Grey Market Premium (GMP)

3.1 Understanding GMP

The Grey Market Premium (GMP) reflects the difference between the IPO price and the price at which shares are being traded in the grey market. A higher GMP suggests strong investor interest and confidence.

3.2 Current GMP

As of today, the GMP for Akums Drugs is +177, indicating that shares are trading at a premium of ₹177 in the grey market. This suggests a potential listing price of ₹856 per share, which is 26.07% higher than the upper end of the IPO price band.

4. Subscription Status

4.1 Day 1 Subscription Data

On the first day, the IPO was fully booked. The retail investor portion was subscribed 3.35 times, while the non-institutional investor portion received 1.96 times subscription. The overall subscription status was 1.37 times, with 43% of the buyers being Qualified Institutional Buyers (QIBs).

4.2 Day 2 Subscription Data

By the second day, the subscription status remains strong, reflecting continued investor interest. The employee portion has seen a 1.07 times subscription, demonstrating positive market sentiment.

5. IPO Review

5.1 Financial Performance

Akums Drugs has a solid track record with robust revenue and profitability. Its growth is supported by a strong position in the pharmaceutical value chain and extensive R&D capabilities.

5.2 Industry Position

The company’s established presence in both domestic and international markets, coupled with its diverse product portfolio, enhances its competitive edge.

5.3 Risk Factors

• Short-Term Focus: A significant portion of the IPO funds is intended for exiting existing stakeholders rather than long-term growth initiatives.
• Limited Reinvestment: Only 35% of the IPO proceeds are allocated for reinvestment, raising concerns about the company’s commitment to sustainable growth.

6. Expert Opinions

6.1 Highbrow Securities

Tarun Singh, MD of Highbrow Securities, highlights Akums Drugs’ strong industry position but advises caution. The IPO primarily aims at inorganic growth through acquisitions, with a substantial portion of funds allocated for stakeholder exits.

6.2 Stoxbox

Stoxbox praises Akums Drugs for its robust domestic and international presence, competitive market advantage, and strategic growth initiatives. The brokerage values the IPO at a reasonable P/E ratio of 29.7x and recommends subscribing.

7. Should You Subscribe?

7.1 Positive Aspects

• Strong Market Interest: The IPO was fully subscribed on its first day, reflecting high investor confidence.
• Favorable GMP: A significant premium in the grey market suggests strong potential returns.
• Established Market Position: Akums Drugs has a solid foundation and extensive market reach.

7.2 Negative Aspects

• Short-Term Focus: The emphasis on exiting existing stakeholders may indicate a lack of long-term growth strategy.
• Limited Reinvestment: Only a small portion of the IPO funds is directed towards operational and growth initiatives.

8. Conclusion

The Akums Drugs IPO shows strong initial interest and a favorable GMP, suggesting it could be a worthwhile investment. However, potential investors should weigh the short-term focus and limited reinvestment concerns against the company’s solid financials and market position. As always, consider your own investment strategy and risk tolerance before making a decision.

9. FAQs

1. What is the Grey Market Premium (GMP) and why is it important?

The GMP indicates the premium at which IPO shares are trading in the grey market compared to the issue price. It helps gauge investor sentiment and potential returns. Akums Drugs IPO

2. How can I apply for the Akums Drugs IPO?

You can apply for the IPO through your stockbroker or online trading platform by filling out the application form and providing the necessary details.

3. What happens if I don’t get allotted shares in the IPO?

If shares are not allotted, the application money will be refunded.

4. When will the Akums Drugs shares be listed on the stock exchange?

The shares are expected to be listed on [Insert Listing Date].

5. Can I sell IPO shares immediately after listing?

Yes, you can sell IPO shares after they are listed, but monitor market conditions and stock performance for the best results.

Akums Drugs IPO

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