Life Sciences Indegene IPO Filling Up FAST: 57% Guaranteed Return?
Indegene, a life sciences digital services provider, launched its IPO on May 6th. The retail portion and non-institutional investor segment are already fully subscribed, indicating strong investor interest. Brokerage firms recommend subscribing due to the company’s growth trajectory, strong financials, and unique market position.
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Indegene IPO Strong Start
The IPO of Indegene Ltd, a company offering digital services to the life sciences sector, began its public subscription on May 6. By 2:37 pm on the first day, the IPO had garnered bids for 84% of the offered shares, totaling 2,33,71,029 shares out of 2,86,25,450.
The retail segment saw full subscription on the first day, while the non-institutional investor category achieved full subscription within a few hours of opening and currently stands at 1.59 times subscription.
However, the qualified institutional buyers segment has only received 1% subscription. The IPO will continue accepting subscriptions until May 8, with share allotment likely to be finalized on May 9. The listing is scheduled for May 13 on both the BSE and NSE, with a price band set at Rs 430-Rs 452 per share.
Indegene: Strong Grey Market Premium
Market observers report that unlisted shares of Indegene Ltd are currently trading at a premium of Rs 262 in the grey market, surpassing its issue price. This translates to a 57.96% expected listing gain from the public issue. Grey market premium (GMP) fluctuates based on market sentiments and reflects investors’ willingness to pay above the issue price.
Swastika Recommends Indegene IPO
Brokerage firm Swastika has given an “Apply” rating to the Indegene IPO. They noted that the company has demonstrated consistent growth in its financial performance over the past three fiscal years, supported by a solid client base of 65 active clients as of December 31, 2023.
Swastika also highlighted Indegene’s robust technology portfolio, which enhances its digital capabilities. While the price-to-earnings (P/E) valuation of 37.79x seems reasonable, the lack of directly comparable listed peers makes a definitive assessment challenging.
Nevertheless, considering Indegene’s unique market position, strong growth trajectory, and established client base, Swastika recommends this IPO to investors for both listing gains and long-term investment.
Ventura Likes Indegene IPO
Ventura brokerage also recommended subscribing to the Indegene IPO, citing the company’s workforce of 5,181 employees and global presence across North America, Europe, and Asia. They highlighted Indegene’s unique position in the market, with nearly 98% of global revenue and strong growth potential, expected to achieve an average CAGR of 6.5% in the coming years.
Ventura emphasized Indegene’s combination of domain expertise and technological capabilities, positioning it as a key partner for life sciences companies in the digital-driven landscape.
SBI Recommends Indegene IPO
Similarly, SBI Securities advised investors to subscribe to the Indegene IPO, noting that the company is valued at an annualized FY24 P/E multiple of 30.5x based on the upper price band. They highlighted Indegene’s unique business model and strategic client relationships with 20 of the Top 20 global biopharmaceutical companies in FY23.
SBI Securities pointed out Indegene’s strong PAT CAGR of 12.7% between FY21-FY23 and anticipated net debt-free status post-issue. They recommended investors to subscribe to the issue.
Indegene IPO Details
The Indegene IPO consists of a fresh issue of 16.8 million shares, valued at Rs 760 crore, alongside an offer for sale (OFS) of 23.9 million shares, worth Rs 1,081.76 crore.
For investors, the minimum lot size for an application is 33 shares, requiring a minimum investment of Rs 14,916 for retail investors. Small non-institutional investors (NII) need to invest in a minimum of 14 lots (462 shares), totaling Rs 2,08,824, while big NII (bNII) need to invest in a minimum of 68 lots (2,244 shares), amounting to Rs 10,14,288.
Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, J.P. Morgan India Private Limited, and Nomura Financial Advisory And Securities (India) Pvt Ltd are serving as the book-running lead managers for the Indegene IPO, with Link Intime India Private Ltd acting as the registrar for the issue.
Indegene Company Overview
Established in 1998, Indegene Limited specializes in delivering digital solutions tailored for the life sciences sector. Its services span various aspects of the pharmaceutical industry, including drug development, clinical trials, regulatory submissions, pharmacovigilance, and sales and marketing support.
Indegene’s service portfolio encompasses four main categories: enterprise commercial solutions, omnichannel activation, enterprise medical solutions, and enterprise clinical solutions & consultancy services.
In the financial year 2022-23, the company witnessed substantial growth, with its revenue increasing by 39.85% and its profit after tax (PAT) rising by 63.43%.
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