Akums Drugs and Pharma shares: Akums Drugs and Pharma shares are trading at a 7% premium over the issue price

Akums Drugs and Pharmaceuticals shares debuted on the bourses on Tuesday at a premium of 6.8%. The shares were trading at Rs 725 on the NSE and BSE against the issue price of Rs 679.

Before the listing, the company’s shares were traded in the private market at an average price of Rs 140.

The IPO received a good response from investors with the total number of subscriptions standing at 63.5%. Analysts advised investors to subscribe for the IPO as the issue is available at reasonable valuations.

Additionally, the company is the largest CDMO serving the Indian pharmaceutical industry with an established market presence and a diversified customer base.

The net proceeds from the IPO will be used by the company to repay/prepay debt of the company and its subsidiaries, fund additional working capital requirements, pursue inorganic growth initiatives through acquisitions and for general corporate purposes. Akums Drugs and Pharmaceuticals is a contract development and manufacturing organization (CDMO) offering a comprehensive range of pharmaceutical products and services in India and abroad. The company operates across the pharmaceutical value chain, operating as a CDMO, formulation vendor and API manufacturer. The growth in the chronically ill patient population, insurance penetration, generic medicines trade, demand from tier II and III cities and government programs focused on access to medicines are supporting the growth in the Indian pharmaceutical market. Contract development and manufacturing organizations help pharmaceutical companies to adopt an asset-light model and gain access to global and specialized expertise while keeping up with the rapid pace of innovation.

In FY24, the company’s revenue from operations grew 14% year-on-year to Rs 4,178 crore from Rs 3,655 crore in the previous fiscal. Meanwhile, profit after tax fell drastically to Rs 79 lakh from Rs 97.8 crore a year earlier.

Axis Capital, ICICI Securities, Citigroup Global Markets India and Ambit acted as lead managers for the issue, while Link Intime India acted as registrar.