Glenmark Life Sciences IPO REVIEW: Open now! Should you invest? Check what Anil Singhvi has to say - know positives and negatives

As the three-day initial public offer for Glenmark Life Sciences begins today, Zee Business Managing Editor and the market guru Anil Singhvi suggests investors apply for the same with a long-term perspective as it is a portfolio quality stock.

Singhvi points out that the valuations of the company are reasonable — neither cheap nor attractive and hence the listing of the company would also be marginal and satisfactory. He adds, the listing wouldn’t be below IPO price nor spectacular or bumper, perhaps.

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The price band of Glenmark Life Sciences IPO has been fixed at Rs 695-720 per share and a retail investor can bid for a total of 13 lots. The public issue, which began today (July 27) will close on July 29, 2021. 

The IPO will have a fresh issue of equity shares worth up to Rs 1,060 crore and the sale of up to 63 lakh equity shares by Glenmark Pharma. The IPO will fetch Rs 1,513.6 crore at the upper price band

Positives

The managing editor says, the promoters' track record and background are very strong, Glenmark Life Sciences is a subsidiary company of Glenmark Pharmaceutical. Glen Saldhana is the chairman and managing director of the company, who has huge experience in the pharma business, he added.

ग्लेनमार्क लाइफ साइंसेज के IPO में क्या करें?

लिस्टिंग पर बनेगा पैसा या लंबी अवधि के लिए लगाएं पैसे?

IPO पर क्या है अनिल सिंघवी की राय?#IPOUpdate #GlenmarkLifeSciences #GlenmarkLifeSciences #IPO @AnilSinghvi_ @NSE @BSEIndia pic.twitter.com/DP2zPgUcTH

— Zee Business (@ZeeBusiness) July 27, 2021

The market guru mentions, besides, the company’s business track record is strong and robust. It is into API business, which is blooming in India and replacing slowly and gradually the neighbouring country China at the global level in this business.

The company has at least 15 out of 20 top pharma company clients globally, moreover, it has a good international presence, says Singhvi adding further, the business outlook of Glenmark Life looks very good and expects huge growth going forward.

The best part of this company is since 2015 till today not even once any of the drug regulators had issued any warning and alert to the company, says Singhvi further mentioning that during the same period the company has at least 38 inspections plants by USFDA and other regulators.

This is a big deal for any pharma company and it also strong process and system of the company, the market guru pointed out.

Negatives

At least 40 per cent of Glenmark Life’s business comes from parent company Glenmark Pharma, and it’s a within-group business, says Singhvi. 

Besides, the company imports 40 per cent of raw materials from China, which is a little risky, he adds, further mentioning that doing import and export from China can never be comfortable, perhaps either because of their policy or sometimes soar ties between two neighbouring countries.

After the IPO, the promoters holding would come down to 82 per cent and they may further reduce their stake an additional 7-8 per cent approximately in the coming years, says the managing editor.

Before concluding, he expects, it would have been better, if the price range would have been a little lower below Rs 720 per share as the company is good quality-wise.