Wednesday, June 9, 2010

Parabolic Drugs IPO

Analysis
Parabolic Drugs, a contract manufacturer of APIs and API intermediates, has come out with a public issue of Rs 200 crore. The IPO will open on June 14, 2010 and will close for subscription on June 17, 2010. The price band is between Rs. 75 - Rs. 85.

The company is engaged in the manufacturing, including contract manufacturing, of APIs and API intermediates for the domestic market as well as for exports to international markets, including regulated markets. It produces the Semi Synthetic Penicillin (SSP) and Cephalosporin range of antibiotics in oral and sterile form, along with their intermediates.

The issue consists of a fresh issue by company and an offer for sale by the selling shareholders. The company will not receive any proceeds from the offer for sale.

The company intends to use the IPO proceeds for its multi-purpose block III at Derabassi; Sterile cephalosporin plant at Derabassi; establishment of Chachrauli plant; custom synthesis & manufacturing site II at IT Park, Panchkula and repayment / prepayment of identified loan facilities.

The book running lead managers to the issue are Avendus Capital Private Limited and ICICI Securities Limited. SPA Merchant Bankers Limited is the co-book running lead manage and Link Intime India Private Limited is the registrar.

Recommendation
The company has done well for the last 5 years but the valuations are bit on the high side. Considering the latest state of IPOs, we would recommend investors to stay put right now and avoid the Parabolic Drugs IPO.

Subscription
The IPO had a pathetic subscription till the last day. The IPO managed to get fully subscribed on the last day. At the close of the IPO,

QII segment got subscribed 1.48 times
NII segment got subscribed 1.2 times
Retail segment got subscribed 0.4 times
Employee reservation segment got subscribed 0.11 times

Allotment
Click here to check if you have been alloted Parabolic Drugs shares!

Listing
The stock closed at Rs 64.15, down 14.47% from its issue price of Rs 75 a share on NSE. On the BSE, the stock ended at Rs 64.80, after seeing day's high of Rs 79 and low of Rs 63.


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