Valiant Laboratories gets healthy premium on debut. What should investors do?
Valiant Laboratories had a decent listing at the bourses on Friday with a premium of around 21% over the issue price. The IPO was priced at Rs 140 at the upper end.
The strong listing can be attributed to the company’s improving financial performance in the recent past, wherein revenues grew at a CAGR of 35% during the FY21-23 period.
«Further, the paracetamol API industry is expected to clock a 5-7% CAGR between FY23 and FY27,» said analysts, while suggesting investors can hold the stock for the long term if they wish to.
«With strong operational efficiencies, Valiant Laboratories has demonstrated high ROCE, positive operating cash flows, strong balance sheet, pursued growth opportunities and better managed unanticipated cash flow variations which will drive the company's performance going forward,» said Prathamesh Masdekar, Research Analyst, StoxBox.
«We, therefore, remain optimistic on the company and recommend investors who have received allotment to hold their shares and consider buying on dips as well from a medium to long term perspective,» Masdekar added.
The IPO was well-received by investors with a subscription rate of 29.76 times.
Net proceeds from the issue will be utilised towards part-financing its capex, funding working capital requirements and other general corporate purposes.
Valiant Labs is an active pharmaceutical ingredient (API/bulk drug manufacturing company, with a focus on producing Paracetamol.
