Comparing SBFC Finance and Concord Biotech IPOs: Making the Right Investment Choice


The stock market is abuzz with the excitement of Initial Public Offerings (IPOs), and currently, two notable companies, SBFC Finance and Concord Biotech, have opened their doors for subscription. While both IPOs have garnered positive feedback from analysts, it appears that SBFC Finance is the preferred choice among investors if they had to select one.

SBFC Finance Vs Concord Biotech IPO

Closing on Monday, SBFC Finance's IPO is priced reasonably, offering ample potential for healthy listing gains. The unofficial market trends support this notion, as the Grey Market Premium (GMP) for the company's shares hovers around Rs 38, compared to the upper price band of Rs 57.

Prashant Tapse, VP-Research at Mehta Equities, opines, "The valuations of SBFC Finance are reasonable when compared to other listed peers, while Concord Biotech's offer comes with a concern of 100% offer for sale, which may keep conservative investors away."

The structure of SBFC Finance's IPO includes a fresh equity issue of Rs 600 crore and an offer for sale (OFS) of Rs 425 crore, whereas Concord Biotech is conducting a complete OFS, issuing 2.09 crore equity shares, and aggregating up to Rs 1,551 crore.

Concord Biotech's offer has generated considerable interest, given its backing from Rakesh Jhunjhunwala's Rare Enterprises and another leading investment firm, Quadria Capital Fund. This IPO will conclude on August 8.

However, when purely assessing valuations and the probability of listing gains, analysts strongly recommend investing in SBFC Finance.

At the upper price band, SBFC Finance's stock is valued at 2.5-3x P/BV (Price-to-Book Value) trailing FY23 book, which analysts believe is an attractive proposition. Meanwhile, Concord Biotech is valued in the range of P/E (Price-to-Earnings) of 25-32x.

Avinash Gorakshakar of Profitmart Securities points out, "SBFC Finance boasts an experienced management team, and the IPO is fairly priced. The market also favors financial companies at the moment. While Concord Biotech is a very good company, listing gains may not be substantial due to aggressive pricing."

Concord Biotech is a prominent global manufacturer of select fermentation-based APIs (F-APIs), catering to immunosuppressants and oncology, with a market share of over 20% by volume in 2022.

Investors, after witnessing stellar listing gains in IPOs like Utkarsh SFB, IdeaForge, and Cyient DLM, are eagerly awaiting the next promising IPO that can replicate such stellar performance.

In conclusion, while both SBFC Finance and Concord Biotech are enticing investment options, SBFC Finance seems to be the more favorable choice for potential listing gains, given its reasonable valuations and market sentiment favoring financial companies.

Also Read : SBFC Finance IPO Oversubscribed 75 Times: Exploring Grey Market Premium and Key Insights

Also Read : Business SBFC Finance IPO: GMP, Subscription Status, and Expert Opinions

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