Biocon subsidiary Syngene made a stellar debut on the bourses today with the stock opening at INR295 per share against the issue price of INR250 per share. On NSE, the stock opened at INR295 which became the floor and touched an intraday high of INR318.5 apiece. Shares closed the day at INR310.55 apiece, marking a return of 24.2% over the allotment price on the first day of public trading.
The situation was not very different on BSE where the stock made a high of INR318.2 per share and closed at INR310.4 per share, making an equally impressive listing.
The IPO of the Bangalore-based contract research organization (CRO) received massive subscription of 32 times, including 4.8 times in retail category. Before the IPO, the company placed 60 lakh shares with anchor investors to raise INR150 crore.
The IPO had attracted favourable recommendations from brokerages such as Anand Rathi, Way2Wealth, ICICIdirect, and Reliance Securities. Private equity investor IVF (India Value Fund) Trustee Company – which is a shareholder in Syngene – did not sell its shares. IVF bought 10% stake in Syngene in January this year at the effective rate of INR190 per share.
This is worth highlighting that the IPO was the second offer for sale (OFS) issue this year. Considering the fate of UFO Moviez – the other OFS IPO this year – Syngene has done well. Contrasting Syngene, investors lost money in UFO Moviez which is still languishing below the issue price. For the simple fact that existing shareholders are sole beneficiaries in OFS issues, we are generally wary of them; however, Syngene was an exception as IVF Trustee Company did not participate in the issue.
Since Syngene IPO received massive subscription, allotment has been low. However, investors have at least three more options in August following a strong build up in IPO pipeline in India. With the latest approval to Nuziveedu Seeds, the number of companies with IPO clearances has increased to 23.