Divi's Laboratories scaled new heights at Rs 369 today, giving investors a solid gain over the offer price.
However, by 14:50 IST, the stock of the fledgling pharmaceuticals company slipped from the higher levels to Rs 357.25 (still up 7.65%) on the BSE. Earlier, it recovered from an intra-day low of Rs 325. The stock recorded a substantial volume of 4.86 lakh shares.
The stock has now gained 155% from its offer price of Rs 140, and 122% from its listing price of Rs 161.10 on the BSE on 12 March 2003.
Dealers said there was huge institutional support for the stock. As on 31 March 2003, the promoters holding in Divi's Laboratories (DLL) was at 53.85%, while institutions and the public held 15.18% and 19.97% respectively.
The rise in the DLL scrip is also attributed to the impressive results from the company on Thursday.
For FY 2002-03, the company recorded a 50% rise in net profit to Rs 54.9 crore (Rs 36.57 crore) on a 19% increase in net sales to Rs 246.19 crore (Rs 207.05 crore).
Meanwhile, for the current financial year (FY 2003-04), the company issued a guidance of Rs 60-65 crore net profit on total income of Rs 310 crore.
Analysts said the forecast for the current fiscal is conservative and the company may do much better.
DLL came out with an initial public offer (IPO) of 32,04,684 equity shares of Rs 10 each in February this year. Of this, 12,69,673 shares involved a fresh issue and 19,35,011 equity shares were offered to the public by existing shareholders.
The entire issue was made through the 100% book-building method. The floor price for the issue was set at Rs 130 per share. The IPO opened on 17 February and closed on 21 February 2003.
The IPO was a huge success, being oversubscribed by nearly 20 times (aggregate 6,24,82,900 shares at a bid price of Rs 140). With the issue, the equity capital of the company increased to Rs 12.82 crore from Rs 11.55 crore.
DLL plans to use the net proceeds of the fresh issue for replenishing internal accruals used for setting up a second manufacturing facility near Visakhapatnam in Andhra Pradesh.
DLL is a leading contract research and manufacturing company. It has a multi-purpose manufacturing facility on a 300-acre site located near Hyderabad in Nalgonda district of Andhra Pradesh. As this facility is nearing full utilisation, the company is planning to augment the manufacturing capacity by setting up a second manufacturing facility spread over 314.85 acres at a cost of Rs 40.22 crore.
The second facility near Hyderabad will not only expand the manufacturing capacity for active pharmaceutical ingredients (API) and intermediaries, but also provide its multinational customers an alternative plant site and assured supply.
DLL has obtained ISO-9001, ISO-14001 and OHSAS-18001 certifications for its manufacturing operations, quality systems, environment management systems and occupational safety and health procedures.
Its existing manufacturing facility has been inspected by the US Food & Drug Administration (US FDA) for the manufacture of APIs and intermediaries. Six of its products have been approved for sale in the US markets. The company has also obtained Certificate of Suitability (CoS) from the European Directorate for some of its APIs for sale in Europe.