Orchid Pharma shares hit 52-week high on raising ₹400 cr via QIP

Shares of Orchid Pharma surged as much as 4% and hit a 52-week high on Wednesday after the company announced ₹400 crore worth of investment from marquee investors via its qualified institutional placement (QIP) route.

The Orchid Pharma Ltd shares opened a gap up at ₹500 against the previous session close of ₹495.05, and surged to the intra-day and 52-week high of ₹519.70 on the Bombay Stock Exchange (BSE). At the current share price, the market cap of the company has surged to ₹1,974.09 crore.

The Orchid Pharma board, in its meeting held on June 27, 2023, approved the issue and allotment of 9,902,705 equity shares of face value ₹10 each to eligible qualified institutional buyers at the issue price of ₹403.93 apiece (including a premium of ₹393.93 per equity share), reflecting a discount of ₹21.26 (i.e. 5%) on the floor price of ₹425.19 per equity share, aggregating to ₹400 crore.

The issue opened on June 22, 2023, and closed on June 27, 2023. After the allotment of equity shares, the paid-up equity share capital of the company has increased from ₹408,164,000 comprising 40,816,400 equity shares to ₹50,71,91,050 comprising 50,719,105 equity shares, the company added.

The list of allottees who have been allotted more than 5% of the equity shares offered in the QIP issue includes Massachusetts Institute of Technology (MIT) (23.75%), Quant Mutual Fund-Quant Multi Asset Fund (12.75%), Quant Mutual Fund - Quant Value Fund (6.75%), Carnelian Structural Shift Fund (6.25%) and Societe Generale (6%).

Orchid Pharma is an active pharmaceutical ingredients (“API”) manufacturing company, with the widest portfolio of cephalosporin APIs along with a few veterinary products. The company sells products under a business-to-business model in over 40 countries, including the USA, Vietnam, Germany, France, and Turkey. The promoter and promoter group owns an 89.96% stake in the company, while 10.04% is owned by the public.

The company supplies products in both domestic and overseas markets to pharmaceutical companies and pharmaceutical agents. For Fiscal 2023, the company's export sales stood at ₹551 crore, around 82.85% of its total revenue worth ₹665.8 crore in the fiscal year. The company's domestic sales accounted for 17.15% of its total revenue from operations at ₹114.1 crore. The company's total revenue increased to ₹665.8 crore in FY23, up 19% from ₹559.5 crore in FY22, which grew 24.33% from ₹450 crore in FY21.

The company claims its exports have grown from ₹405.2 crore in fiscal 2021 to ₹489.8 crore in fiscal 2022 and ₹551.7 crore in fiscal 2023, with a CAGR of 16.68% from fiscal 2021 to fiscal 2023. Orchid has three manufacturing facilities located at Alathur, Tamil Nadu, with its API facility spread over an aggregate area of 64.09 acres of which up to 28 acres of land is owned by the company.