Innova Captab makes tepid market debut, stock surges 16% post opening

Innova Captab Limited, the pharmaceutical company, witnessed a modest premium upon its listing today on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Innova Captab was listed at Rs 456.10 (premium: 1.02 per cent) on BSE and Rs 452.10 (premium: 0.9 per cent) on NSE. However, post-opening, the stock witnessed an impressive surge of 16 per cent reaching an intraday high of Rs 520 apiece on the NSE.

Innova Captab IPO, a book-built issue of Rs 570 crore, comprised a fresh issue of 0.71 crore shares amounting to Rs 320.00 crore and an offer for sale of 0.56 crore shares aggregating to Rs 250 crore. The IPO bidding commenced on December 21, 2023, concluding on December 26, 2023, with the allotment finalised on December 27, 2023.

“Innova Captab, the generic pharma manufacturer, made a lukewarm debut on the stock market, listing at Rs 471 per share, a mere 5.1 per cent premium over its IPO price of Rs 448. This lackluster performance falls short of pre-listing expectations. Despite such a listing, Innova Captab still possesses its core strengths, including a strong market position, robust financials, and strategic growth initiatives. However, the flat debut highlights the potential risks associated with the highly competitive market, regulatory environment, and currency fluctuations. Given the uncertain outlook, a cautious approach is warranted, and investors may exit their position; however, those who want to hold it should maintain a stop loss at the issue price,” said Shivani Nyati, Head of Wealth, Swastika Investmart Ltd.

Despite a meagre opening, the stock defied expectations, showcasing resilience and a robust demand from investors. The IPO's price band was set at Rs 426 to Rs 448 per share, with a minimum lot size for an application being 33 shares. Retail investors required a minimum investment of Rs 14,784, while the minimum lot size investment for sNII and bNII stood at 14 lots (462 shares) and 68 lots (2,244 shares), respectively.

ICICI Securities Limited and JM Financial Limited served as the book running lead managers for the IPO, with Kfin Technologies Limited acting as the registrar for the issue.

Incorporated in January 2005, Innova Captab Limited operates in three business segments, offering contract development and manufacturing services, dealing in branded generics domestically, and participating in international business with branded generics. The company's diverse product portfolio includes tablets, capsules, dry syrups, dry powder injections, ointments, and liquid medicines.

The IPO, which saw a robust response from investors, raised Rs 171 crore from anchor investors on December 20, 2023. The pharmaceutical company's customer base includes prominent names such as Cipla, Glenmark Pharmaceuticals, Wockhardt, and others.

As of October 31, 2023, the company boasted 200 active product registrations and 20 registrations pending renewal with international authorities. Furthermore, 218 new registration applications are currently in progress.

The overwhelming response from investors is evident in the IPO's subscription figures, with the public issue oversubscribed by 55.26 times. The retail category witnessed a subscription of 17.15 times, the Qualified Institutional Buyers (QIB) category recorded an impressive 116.73 times, and the Non-Institutional Investors (NII) category reached 64.95 times.