Cadila lists at discount to offer price

Cadila lists at discount to offer price

MUMBAI, APR 27: Pharmaceuticals firm Cadila Healthcare debuted at a significant discount to its offer price on the Bombay Stock Exchange on Thursday and dealers said it was in line with market expectations.

The stock was quoted at Rs 149 in late morning trade after it was listed at a price of Rs 196.90. Cadila made a public offer of its shares in February this year at a price of Rs 250 per share.

"The share was offered at a high price-earning multiple of around 30-35 and subsequently the industry has come in for a derating after disappointments in the budget," said Rohit Bhat of Sunidhi Consultancy.

Pharmaceuticals stocks had fallen sharply after the 2000/01 (April-March) Union budget did not unveil the expected tax sops for research efforts and on the proposed phasing out of tax concessions on export earnings. "It is just a question of timing, price levels at the time of Cadila's IPO were much higher and some stocks have fallen around 30 per cent from there," said S R Sharma, Managing Director of Prime Broking India.

The public issue of Cadila had opened on February 28 and the 30 share Bombay index closed at 5740.69 on that day. In late Thursday morning trade the index was hovering around 4650. "The aggressive pricing left nothing for the investor so itis not surprising the share has listed at a sub-offer price level," Bhat said.

Dealers said they expected other pharmaceuticals firms which had made IPOs in recent times to list at discounts to their offer price. Dealers said this was only the second public issue in 2000 which was listed at a discount to the offer price level but they were expecting more to follow.

"Valuations were at a peak at that time hence these issues were oversubscribed, I see the Ajanta Pharma issue also listing at a lower than offer price level," a dealer at a domestic brokerage said. Ajanta Pharmaceuticals made a public offering of its shares at a price of Rs 225.