Valiant Laboratories IPO sails through on day 3; bidding for the issue closes today

The Rs 152.46 crore-initial public offering (IPO) of Valiant Laboratories managed to sail through on Friday, which is the third and final day of the bidding process. The issue was subscribed only 33 per cent at the end of first day, while it ended the second day with an overall subscription of 42 per cent.

The Gujarat-based drug maker Valiant Laboratories is offering its shares in the fixed price band of Rs 133-140 apiece with a lot size of 105 equity shares and its multiples thereafter. The block of Rs 156.46 crore is entirely a fresh sale of 1,08,90,000 crore equity shares.

According to the data, the investors made bids for 1,10,65,950 equity shares, or 1.45 times, compared to the 76,23,030 equity shares offered for the subscription by 3.00 pm on Friday, September 29. The bidding for the issue commenced on Wednesday, September 27 and will conclude today.

The allocation for retail investors was subscribed 2.50 times, while the portion reserved for non-institutional investors saw a subscription of 87 per cent. However, the quota set aside for qualified institutional bidders (QIBs) was booked merely 5 per cent as of the same time.

Incorporated in 1980, Valiant Laboratories,is a pharmaceutical ingredient manufacturing company in India. It majorly focuses on manufacturing Paracetamol. Its manufacturing unit is located in Palghar (Maharashtra), with an annual total installed capacity of 9,000 MT per annum. It also has an R&D Facility, equipped with a laboratory and infrastructure.

Valiant Laboratories imports the raw material for the manufacture of Paracetamol named para–amino phenol from China and Cambodia. Unistone Capital is managing this issue, while Link Intime India is the registrar for the IPO. Shares of the company are set to list on both BSE and NSE.

Brokerage firms have a mixed view on the company. A few are positive on the issue citing its strong balance sheet, decent growth prospects and positive outlook in the coming years. While others suggest avoiding the issue citing its limited ties with buyers and suppliers, single product line and highly regulated business. However, valuations are considered to be reasonable.

Valiant Laboratories has demonstrated high ROCE, positive operating cash flows, strong balance sheet, pursued growth opportunities and better managed unanticipated cash flow variations, which will drive the company's performance going ahead, said StoxBox in his IPO note. The issue is fairly valued compared to its peers," it added with a 'subscribe' rating for the issue.

Its financial performance has been improving, and it has the benefit of experienced promoters, but manufactures a single-product. It is dependent on a limited number of suppliers and customers. There is intense competition with high regulations. The issue is fairly priced, but considering other risks and current market volatility, we will avoid this IPO," said Swastika Investmart.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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