Valiant Laboratories debuts at a premium of 16% at Rs 162 per share on the NSE

Valiant Laboratories Limited, an Indian pharmaceutical ingredient manufacturing company specializing in the production of Paracetamol, made its debut in the Indian stock market today.

The stock debuted at Rs 161 per share, representing a 15% increase compared to the issue price on the BSE. However, on the NSE, the stock opened at Rs 162.15 per share, marking a 15.8% increase from its initial public offering price of Rs 140 per share.

As of the time of writing, the stock is trading at Rs 167 per share on the BSE, with intraday highs and lows of Rs 169 and Rs 161, respectively. The current market capitalization of the company stands at Rs 734.5 crore.

Unistone Capital Pvt Ltd is the book-running lead manager of the Valiant Laboratories IPO, while Link Intime India Private Ltd is the registrar for the issue.

The company’s allocation of the net proceeds from the offering is intended to serve several key objectives. Firstly, it aims to invest in its wholly owned subsidiary, Valiant Advanced Sciences Private Limited (VASPL), with the primary purpose of partially funding VASPL’s capital expenditure requirements for the establishment of a specialty chemicals manufacturing facility at Saykha Industrial Area, Bharuch, Bharuch, Gujarat (Proposed Facility).

Additionally, the company intends to provide financial support to VASPL to meet its working capital needs. Lastly, a portion of the funds will be allocated for general corporate purposes, ensuring flexibility in addressing various operational and strategic requirements.

Company profile

Valiant Laboratories Limited is an Indian pharmaceutical ingredient manufacturing company specializing in the production of Paracetamol. The company’s manufacturing facility is situated in Palghar, Maharashtra, spanning across 2,000 square meters of land and boasting an annual installed capacity of 9,000 metric tons. It also maintains an R&D Facility equipped with an analytical laboratory and the necessary infrastructure for product development. The company was incorporated in 1980.

The company sources Para Amino Phenol, a key raw material for Paracetamol production, from suppliers in China and Cambodia. As of April 30, 2023, Valiant Laboratories employs a workforce of 86 individuals.

Subscription details

On October 3, 2023, the final day of the IPO window, the IPO witnessed an impressive response with a subscription rate of 29.76 times. The public issue received mixed interest, as the retail category was subscribed 16.06 times, the QIB category achieved a subscription rate of 20.83 times, and the NII category reached a subscription rate of 73.64 times.

The company attracted Rs 45.74 crore from various anchor investors by allocating 32.66 lakh equity shares at Rs 140 per share. The complete lock-in period for these anchor investors ends on February 14, 2024.

The IPO price range was set between Rs 133 and Rs 140, with a face value of Rs 10 per share and a lot size of 105 shares. The total size of the company’s IPO was Rs 152.46 crore, and the final share issue price was fixed at Rs 140 each.

Financial Performance

Conclusion 

The crucial question that arises in everyone’s mind is whether to hold the shares. Given the current market conditions, with broader indices having fallen from their all-time highs and hovering around 19,600 levels, investors who applied for listing gains only and have gained a 16% return on the listing day itself may consider booking profits at this point.

Furthermore, the company’s net profit registered a moderate growth of only 5% during FY23, increasing from Rs 27.50 crore to Rs 29 crore, while the revenue showed an impressive growth of 15% during the same period. The net profit margin stood at 8.5% in FY23 compared to 9.4% in FY22.

On the other hand, investors with a higher risk appetite may choose to hold the shares for the medium to long term, a strategy that could prove to be beneficial.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.