Valiant Laboratories lists at Rs 162, a 16% premium to IPO price

Shares of Valiant Laboratories on October 6 listed at a premium of 15.8 percent over its issue price of Rs 140. The stock debuted at Rs 162.15 on the NSE and Rs 161 on the BSE. The listing was in-line with analyst expectations and the decent subscription numbers seen by the IPO. The Rs 152 crore-issue was subscribed 29.76 times with investors buying 22.68 crore shares against the offer size of 76.23 lakh. High net worth individuals bought 73.64 times their quota of shares and retail investors 16.06 times the shares allotted to them.

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Valiant Laboratories is an active pharmaceutical ingredient and bulk drug manufacturing company with focus on manufacturing of paracetamol.

It will make use of the IPO proceeds for setting up a speciality chemicals manufacturing facility in Gujarat owned by subsidiary Valiant Advanced Sciences (VASPL). The subsidiary’s working capital requirements will also be funded from the IPO funds.

At upper end of the price band, the issue was priced at 15.71x, which was fair, according to analysts. High return ratios – 33.73 percent return on equity and 22.76 percent return on capital employed for FY23 – bode well for the stock, the noted. However, the over-dependence on one product and client concentration are some key risks to monitor going ahead.

On the financial front, the company witnessed a growth of 5.5 percent as its net profit rose to Rs 29 crore for the year ended March 2023 from Rs 27.5 crore in the year-ago period. The revenue from operations grew by 14.5 percent to Rs 333.9 crore from Rs 291.5 crore during the same period.

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