Quest Laboratories makes strong debut, shares list at 60% premium to IPO price

Quest Laboratories IPO listing: Making a dream debut, Quest Laboratories Ltd shares listed at a premium of 60% to the issue price on the NSE SME platform on Thursday, May 23.

Shares of the pharmaceutical products manufacturer opened at ₹155.1 per piece on NSE SME platform against the issue price of ₹97 per share, reflecting gains of 60% on listing.

The stock hit a high of ₹159 soon after the listing, but retreated from the peak due to some profit taking by large investors.

Quest Lab shares dropped 5% from the listing price to trade at ₹147.35 at 10.05 am. More than 13.55 lakh shares of the company changed hands in early deals. Total turnover amounted to ₹20.89 crore while the market capitalisation stood at ₹241.47 crore.

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Quest Laboratories earlier raised ₹43.16 crore from public investors through its initial public offering.

Quest Laboratories public offer was open for subscription from May 15 to May 17. The ₹43.16 crore IPO comprised a fresh issue of 44.5 lakh shares. The company fixed the price band at ₹93 to ₹97 per share. The minimum lot size was 1,200 shares. The minimum investment was ₹1,16,400 for retail investors.

The pharmaceutical company’s public offer was received well by investors. The IPO was booked 85 times at the close of bidding on May 17, driven by strong demand from non-institutional investors. The IPO received bids for over 25.47 crore shares compared to 29.85 lakh shares on offer.

Non-institutional investors’ category was subscribed more than 184 times. The retail individual investors’ portion was booked 57.62 times. The qualified institutional buyers’ (QIBs) category was booked 57.2 times.

The company finalised the share allotment to bidders on May 21. It started refunds and credit of shares to demat accounts on May 22.

Quest Laboratories produces pharmaceutical formulations such as antibiotics, antispasmodics, antimalarials, antiemetics, anti-inflammatories, diabetes treatments, respiratory medications and antidepressants. It has a manufacturing plant in Pithampur Madhya Pradesh.

The company plans to spend ₹26 crore of the IPO proceeds to finance capital expenditure for the purchase of plant and machinery for expansion at the existing manufacturing facility.

The company intends to expand and upgrade manufacturing capacities for existing formulations and new formulations currently in the development and commercialisation stages.

It has proposed to use ₹10 crore for funding working capital requirements and the rest for general corporate purposes.