Rubicon Research, a specialty pharmaceutical company, launched its Initial Public Offering (IPO) with a modest start, achieving a 7% subscription rate on its first day. The Rs 1,377 crore IPO has garnered attention from retail investors and commands a significant grey market premium.

IPO Details and Subscription Status

The IPO's structure includes a fresh issue of shares worth Rs 500 crore and an offer for sale of Rs 877 crore. Rubicon Research has set a price band of Rs 461-485 per share, valuing the company at approximately Rs 7,990 crore.

Grey Market Premium and Analyst Recommendations

The IPO has generated significant interest in the grey market, commanding a premium of Rs 90, which represents a 19% increase over the upper price band. This strong grey market performance suggests positive investor sentiment towards the company.

Arihant Capital has rated the IPO as 'Subscribe', citing Rubicon's integrated pharmaceutical development capabilities and its presence in the US market as key strengths.

Company Overview and Operations

Rubicon Research operates across multiple geographies, including the United States, Canada, and India. The company's portfolio includes:

• 72 US FDA-approved products
• Three manufacturing plants in India

The recent acquisition of Validus Pharmaceuticals has expanded Rubicon's reach, providing access to prescribers across 44 US states.

Financial Performance

Rubicon Research has demonstrated remarkable financial growth:

The company has shown a significant turnaround, transitioning from a loss-making entity to a profitable one, with substantial improvements in revenue and EBITDA margins.

Conclusion

While the initial subscription rate of 7% on day one might seem modest, the strong retail investor participation and the significant grey market premium indicate potential investor interest in Rubicon Research's IPO. The company's improved financial performance and strategic positioning in the pharmaceutical sector could be factors driving this interest. However, as with any investment decision, potential investors should carefully consider their risk appetite and conduct thorough research before participating in the IPO.

Pharmaceutical formulations company Rubicon Research has successfully raised Rs 619 crore from anchor investors ahead of its Initial Public Offering (IPO). This development marks a significant milestone for the company as it prepares to go public.

Anchor Book Details

The anchor book saw participation from a diverse group of institutional investors, including:

• Goldman Sachs
• HDFC Mutual Fund
• Fidelity Funds
• ICICI Prudential Mutual Fund
• Kotak Mahindra Mutual Fund
• Amansa Holdings
• Aranda Investments

Rubicon Research allocated over 1.27 crore equity shares to 32 funds at Rs 485 per share, which is at the upper end of the price band.

IPO Structure and Timeline

The offer for sale component comes from the promoter, General Atlantic Singapore, which will see its shareholding decrease by 35% post-IPO.

Fund Utilization

The company plans to use the proceeds from the fresh issue as follows:

• Rs 310 crore for debt repayment
• Inorganic growth through acquisitions

Notable Investments

Two mutual funds made significant investments in Rubicon Research:

1. Kotak Mutual Fund
2. Motilal Mutual Fund

Together, these funds invested Rs 169 crore in the pharmaceutical company.

Company Profile

Rubicon Research is a pharmaceutical formulations company with a strong focus on research and development. The company specializes in:

• Developing specialty products targeting regulated markets, particularly the United States
• Operating two FDA-inspected R&D facilities
• Managing two manufacturing plants

This IPO represents an important step for Rubicon Research as it seeks to expand its operations and strengthen its position in the pharmaceutical industry.