Emcure Pharma IPO: GMP indicates positive sentiment ahead of subscription opening

Pune-based Emcure Pharmaceuticals is gearing up for its initial public offering (IPO), which is set to open for subscription on July 3 and close on July 5. Ahead of the IPO launch, the shares are trading at a premium of ₹255 in the grey market, as reported by investorgain.com on Saturday, June 29.

The grey market, an informal venue for trading shares prior to their official IPO listing, serves as a barometer for the expected market sentiment towards the IPO. The Grey Market Premium (GMP) is often used by investors to predict the likely listing price of an IPO. For Emcure Pharmaceuticals, the GMP of ₹255 suggests a potential listing price of ₹1,263, which is 25.3% above the upper price band of ₹1,008 per share.

IPO Details:

The price band for Emcure Pharmaceuticals' IPO has been set between ₹960 and ₹1,008 per equity share, each with a face value of ₹10. The IPO aims to raise approximately ₹1,951.04 crore at the upper price band. This includes a fresh issue of shares worth ₹800 crore and an offer-for-sale (OFS) comprising 1.14 crore equity shares by the company’s promoters and existing shareholders.

The key promoters participating in the OFS are Satish Ramanlal Mehta, Sunil Rajanikant Mehta, Namita Vikas Thapar, and Samit Satish Mehta.

Allocation and Use of Proceeds:

The IPO allocation is structured as follows:

50% is reserved for Qualified Institutional Buyers (QIBs).

15% is set aside for Non-Institutional Investors.

35% is allocated to Retail Investors.

The funds raised from the fresh issue will primarily be used for the repayment or prepayment of certain outstanding borrowings by Emcure Pharmaceuticals, along with general corporate purposes. The proceeds from the OFS will go to the selling shareholders.

Market and Management:

The book-running lead managers for the IPO are Kotak Mahindra Capital Company, Axis Capital, JP Morgan India, and Jefferies India. Link Intime India is acting as the registrar for the issue.

Emcure Pharmaceuticals, headquartered in Pune, has carved out a significant presence in the pharmaceutical industry, and this IPO is expected to bolster its financial standing and fuel its growth ambitions.