Concord Biotech IPO: A Promising Offering from Rakesh Jhunjhunwala's Backed Firm

Rajesh
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Concord Biotech, an Ahmedabad-based biotechnology firm backed by private equity firm Quadria Capital and the late veteran investor Rakesh Jhunjhunwala's firm Rare Enterprises, is all set to launch its initial public offering (IPO) for subscription on August 4. This IPO marks a significant event in the market, with 2.09 crore equity shares being offered for sale by Helix Investment Holdings Pte Limited, the private fund operated by Quadria Capital, as it exits the company.

Concord Biotech IPO: A Promising Offering from Rakesh Jhunjhunwala's Backed Firm

Offering Details:

The public issue will be an offer for sale (OFS) and constitutes 20 percent of the post-offer paid-up equity capital. Out of this, 10,000 equity shares are reserved for the company's employees. The qualified institutional buyers (QIBs), including the anchor book, will have access to half of the issue, while 15 percent is reserved for high net worth individuals (non-institutional investors), and the remaining 35 percent is set aside for retail investors.

Ownership Structure:

Helix Investment Holdings Pte Limited, which is backed by Quadria Capital Fund LP, currently holds a 20 percent stake in Concord Biotech. Late Rakesh Jhunjhunwala, through his asset management firm RARE Enterprises (through RARE Trusts), owns 24.09 percent shareholding. Three trusts - Aryavir Jhunjhunwala Discretionary Trust, Aryaman Jhunjhunwala Discretionary Trust, and Nishtha Jhunjhunwala Discretionary Trust - established for Rakesh Jhunjhunwala's three children, are part of RARE Trusts. The veteran investor and his wife Rekha Jhunjhunwala initially invested in Concord Biotech in 2004.

Business and Financial Highlights:

Concord Biotech, a biopharma company with three manufacturing facilities in India, is a major player in fermentation-based API products. It commands a market share of over 20 percent by volume in this segment and supplies its products to over 70 countries, including regulated markets. As of March 2023, the company had 23 active pharmaceutical ingredients (API) products in its portfolio.

In the financial year ending March 2023, Concord Biotech reported robust earnings, with a 37.2 percent growth in profit to Rs 240 crore and a 20 percent increase in revenue to Rs 853.2 crore compared to the previous year. The company's EBITDA also saw significant growth, jumping 27.3 percent to Rs 343.3 crore, with a margin expansion of 240 basis points at 40.2 percent during the same period.

IPO Timeline and Listing:

The IPO subscription will run from August 4 to August 8, with the anchor book being launched on August 3. After the issue closes, the basis of allotment of IPO shares will be finalized by August 11, and successful investors will have the equity shares credited to their demat accounts by August 17. Refunds for unsuccessful investors will be processed by August 14. The listing of Concord Biotech shares on the BSE and NSE is scheduled for August 18.

Conclusion:

Concord Biotech's IPO presents an attractive investment opportunity, with its strong market position, diversified product portfolio, and impressive financial performance. As investors look forward to participating in this exciting IPO, it represents a significant milestone for the biotechnology sector and the legacy of the late Rakesh Jhunjhunwala in the Indian capital market.

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