The primary market issue from Gland Pharma Limited was subscribed 2.06 times with the support of QIB’s. The non-institutional portion remained undersubscribed.

The company had tapped the capital markets with its fresh issue of Rs 1,250 crs and an offer for sale of 3,48,63,635 equity shares in a price band of Rs 1,490-1500. Earlier the company had allotted 1,29,59,089 shares to 70 anchor investors comprising of 131 entities. The highest allocation was made to Smallcap World Fund who was allotted 8,57,400 shares or 6.62% of the anchor allotment. This was followed by 6,84,300 shares or 5.32% to Government of Singapore.

The issue was open from Monday the 9th of November to Wednesday the 11th of November.

The issue saw QIB’s subscribing the QIB portion 6.4 times. HNI portion was undersubscribed at 0.51 times while Retail portion remained undersubscribed at 0.24 times. There were just under 2 lac applications and the average application size was 1.8 lots or roughly 18 shares.

What went wrong for the issue? There were two broad reasons for the issue receiving poor response from the non-institutional portion. The first reason was the valuation which saw Fosun selling at roughly three times the value it invested three years ago. The PE multiple was 29.87-30.07. What affected investors more was the market cap to sales which was almost ten times, a number unheard of in the pharma sector. The second cause of concern was the fact that the promoters of this company was from China and since the escalation of tension on the Indo-China border there is an anti-China feeling which is growing.

Details of the subscription are given below: –