Syngene gains 24% on debut, near $1-bn market cap

MUMBAI: Syngene International, the Biocon group company which closed its IPO on July 29, had a stellar first day on the bourses on Tuesday with the stock rising nearly 25% on listing and closing at Rs 310, compared to its IPO price of Rs 250.
At close of trading on its stock exchange debut, Syngene had a market capitalization of close to $1 billion. The company’s IPO, through which it raised about Rs 550 crore, was subscribed over 30 times.
The company, which is into contract research, has a strong business model and predictability in revenues, which attracted top domestic and foreign funds to invest in its public offer. “Investors have shown strong interest in this truly “Make in India’ opportunity. Syngene has a strong business model, steady and predictable revenue stream which in turn is backed by a quality management,” said Dharmesh Mehta, interim CEO, Axis Capital, the lead merchant banker to the IPO. “All these factors gave lot of comfort to fund managers and other investors,” Mehta said.
Merchant bankers said this was the first quality pharma IPO in India after more than a decade. Since the Narendra Modi-led NDA government came to power in mid-2014, expectations of a revival in a then slowing economy prompted promoters of several companies to weigh the option of listing on the bourses for fund mobilization. After two consecutive years of relative dry spells, the public offers market is again witnessing some activity now. Compared to six offers in 2013 and eight in 2014, there has been nine offers so far in 2015, data on NSE website showed. Going by the number of draft offer documents already filed with Sebi, merchant bankers say another 10 offers could be on its way.