Zenith Drugs lists at 39% premium at Rs 110 per share on NSE

Zenith Drugs Limited is a pharmaceutical company specializing in manufacturing and trading high-quality, affordable medicines, including generic drugs, which debuted on the Indian stock market today.

The company’s stock opened at Rs 110 per share, indicating a significant premium of 39.24% compared to the final issue price of Rs 79 per share on the NSE. The market capitalisation of the company stands at Rs 179 crore on the NSE.

IPO Proceeds

The company plans to utilise the net fresh issue proceeds for specific purposes. These include purchasing machinery and equipment for establishing a new unit, upgrading the existing manufacturing block, addressing working capital requirements, and meeting general corporate purposes.

Company profile

Incorporated in the year 2000, Zenith Drugs Limited is a pharmaceutical company dedicated to the manufacturing and trading of high-quality and affordable medicines, with a particular focus on generic drugs. The company upholds stringent quality standards by adhering to the guidelines set by the World Health Organization (WHO) for Good Manufacturing Practices (GMP). Demonstrating its commitment to quality assurance, Zenith Drugs Limited has earned the ISO 9001:2015 certification from a reputable EuroUK certification body.

The diversified product portfolio of the company encompasses various medical offerings, including ORS Powder, Liquid Orals, Ointments, Liquid Externals, and Capsules. Approved by the Food & Drugs Administration, the company boasts a comprehensive list of over 600 products, with 325 currently in active production. This robust approval and production status underscore Zenith Drugs Limited’s position as a reliable pharmaceutical entity in delivering a wide range of approved and quality medications to the market.

Subscription details

On February 22, 2024, the final day of the IPO window, the IPO witnessed an impressive response, with a subscription rate of 179.18 times. The public issue received remarkable interest, with the retail category being subscribed 139.28 times, while the QIB and NII categories reached a subscription rate of 106.72 and 368.77 times respectively.

The IPO price band was between Rs 75 to Rs 79 per share, with a face value of Rs 10 per share and a lot size of 1600 shares. The total size of the company’s IPO was Rs 40.68 crore, and the final share issue price was fixed at Rs 79 each.

Conclusion

The crucial question that arises in everyone’s mind is whether to hold onto the shares or book profits. Investors who applied for listing gains only have already earned 39% on the listing day itself and can choose to book the profit it has generated. On the other hand, investors with a higher risk appetite may opt to hold the shares for the medium to long term, which 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.