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In the years 2023 and 2024, many IPOs brought huge earnings for the investors. But tax also has to be paid on this! What is the tax rule on booking listing gains from IPO? How can tax liability on listing gains be reduced? How will the tax be calculated on selling IPO shares?
The Rs 1,513.60 crore initial public offer (IPO) of the subsidiary of pharma major Glenmark Pharmaceuticals, Glenmark Life Sciences is set to hit the street next week. Here are nine things that you should know about the IPO.
Open and close date: The offer will open for subscription on July 27 and the bidding will close on July 29. The anchor book, if any, will open for a day before the issue opening, i.e. July 26.
Price band: The price band for the pharma chemical company has been fixed at Rs 695-720 per share having a face value of Rs 2 per share.
Lot size: Investors can bid for a minimum of 20 equity shares and in multiples, thereafter, translating to a minimum bidding amount of Rs 14,400 at the higher end of the price band. A retail investor can at max apply for 13 lots or 260 shares for Rs 1,87,200.
Issue size: The Rs 1,513.60-crore public offer comprises fresh issuance of equity shares of Rs 1,060 crore, and an offer for sale (OFS) of 63,00,000 shares totalling to Rs 453.60 crore by Glenmark Pharmaceuticals.
The issue size has been reduced for Glenmark Life is reduced to Rs 1,060 crore from Rs 1,160 crore planned earlier. The earlier plan was to sell 73,00,000 lakhs shares via the OFS which now has been reduced to 63,00,000 shares, as per the details laid out by the company.
Objective of issue: The active pharmaceutical ingredients manufacturer will utilise its net proceeds for payment of outstanding purchase consideration to the promoter for the spin-off of the API business from the promoter into the company pursuant to the Business Purchase Agreement dated October 9, 2018 (Rs 800 crore), and funding capital expenditure requirements (Rs 152.76 crore) and meet general corporate purposes.
What’s in it for retail investors: Not more than 50% of the total offer has been reserved for qualified institutional buyers, up to 35% for retail investors, and the rest 15% for non-institutional buyers.
About the company: Glenmark Life Sciences is the leading manufacturer of Active Pharmaceutical Ingredients (APIs). The company develops, manufactures, and supplies high-quality APIs for cardiovascular disease (CVS), central nervous system disease (CNS), pain management, and diabetes, gastrointestinal disorders, anti-infectives, and other therapeutic areas.
Currently, it has 4 manufacturing facilities at Ankleshwar and Dahej in Gujarat and Mohol and Kurkumbh in Maharashtra State with an aggregate annual installed capacity of 725.8 KL as of December 31, 2020.
For the financial year ended March 31, 2021, the company reported total revenue of Rs 1,885.97 crore compared to Rs 886.87 crore in FY19. While the company reported a profit after tax of Rs 351.58 crore in FY21 versus Rs 195.59 crore posted in FY19.
Book Running Lead Managers and Registrar to the IPO: The book running lead managers to the issue are Goldman Sachs, Kotak Mahindra Capital, BoFA Securities, DAM Capital, BoB Caps and SBI Capital Markets. The registrar to the issue is KFintech.
Issue timeline: The issue is likely to finalize the basis of allotment by August 3, and the initialization of refunds will take place by August 4. While the credit of equity shares to depository accounts of the allottee will be done on August 5. The company is expected to make its stock market debut on August 6, 2021.