Indegene IPO subscribed 33 times on Day 3 so far; QIB portion booked over 74x

The initial public offering (IPO) of Indegene continued to receive a strong response from the investors during the third and final day of the bidding process. After being subscribed 1.67 times on day one, the issue was booked 7.35 times at the end of the second day of the bidding.
 

The Bengaluru-based Indegene is selling its shares in the price band of Rs 430-452 apiece. Investors can apply for a minimum of 33 shares and its multiples thereafter. It is looking to raise Rs 1,841.76 crore via IPO, which includes a fresh share sale of Rs 760 crore and an offer-for-sale (OFS) of 2,39,32,732 equity shares.
 

According to the data, the investors made bids for 95,20,22,478 equity shares, or 33.98 times, compared to the 2,88,66,677 equity shares offered for the subscription by 2.25 pm on Wednesday, May 08. The three-day bidding, which opened on Monday, concludes today.
 

The allocation for qualified institutional bidders (QIBs) was subscribed 74.36 times, while the portion reserved for non-institutional investors saw a subscription of 43.92 times. However, the quota set aside for retail investors attracted bids for 5.30 times of their reservation, while employee quota was booked 5.03 times as of the same time.
 

Indegene has provided digital services for the life sciences industry. The company assists with drug development, clinical trials, regulatory submissions, pharmacovigilance, complaints management, and more. It provides enterprise commercial solutions; omnichannel activation enterprise medical solutions; enterprise clinical solutions and consultancy services.
 

The grey market premium of Indegene has remained firmed after the first day of the bidding. Last heard, the company was commanding a premium of Rs 270-275 in the unofficial market, suggesting a listing pop of about 60 per cent for the investors. However, the premium in the grey market stood around Rs 240, before the bidding opened for the issue.
 

Brokerage firms are mostly positive on the issue citing its niche business model, strong financials, robust growth prospects and long-term relationship with leading biopharma players. However, dependence of subsidiaries from revenues, loss of clients, more competition and rich valuations are some concerns for the company.
 

Indegene is a prominent IT player with deep expertise in providing IT solutions in the Lifescience segment. Positioned at the intersection of healthcare and technology, the company's solutions span across different stages of the commercialization lifecycle of drugs and medical devices creating a niche place for itself, said Nirmal Bang Securities.
 

"The company enjoys leadership position in its area of operation and would benefit from the growing digital need in the life science space. The stock is available at an annualised FY24 EV/Ebitda of 23 times and a P/E of 34 times which seems fair given its leadership position," it added with a 'subscribe' rating for the issue citing its unique business model with good growth prospects.
 

Ahead of its IPO, Indegene raised a total of Rs 548.78 crore from anchor investors by allocating them 1,21,41,102 equity shares at Rs 452 apiece. It has reserved a 50 per cent of the net offer for the qualified institutional bidders (QIBs), while non-institutional investors (NIIs) shall be allocated 15 per cent of the net offer. Retail investors have 35 per cent shares reserved from them.
 

The company has a proven track-record of creating value via acquisitions. The primary strategy of the company remains to develop the technology portfolio and pursue strategic acquisitions. The company’s operations are highly concentrated from the life-science space, said Sushil Finance.
 

"The company faces competition from various business segments like IT companies, Contract research offices etc. The company has proposed to use the majority of its net proceeds to retire the debt of their subsidiaries," it added, suggesting investors may apply for the issue with a medium to long term view.
 

Indegene reported a net profit of Rs 241.90 crore with a revenue of Rs 1,969.75 crore for the nine months ended on December 31, 2023. For the year ended on March 31, 2023, the company's net profit came in at Rs 266.10 crore with a revenue of Rs 2,364.10 crore.
 

Kotak Mahindra Capital Company, Citigroup Global Markets India, JP Morgan India and Nomura Financial Advisory and Securities (India) are the book running lead managers of the Indegene IPO, while Link Intime India is the registrar for the issue. of the company shall be listed at both BSE and NSE on May 13, Monday.