Onyx Biotec shares hit 5% upper circuit despite weak market debut

The much-anticipated listing of Onyx Biotec Limited on the NSE SME platform garnered significant attention in the share market. While the debut initially disappointed investors with an 11% discount, a quick recovery saw the stock hitting the 5% upper circuit shortly after its listing. This article delves into the key highlights of the listing, IPO details, and the company’s future prospects.

Weak debut: Onyx Biotec shares list at 11% discount

Onyx Biotec shares were listed on the NSE SME platform, Emerge, at ₹54.05 apiece, representing an 11.39% discount to the IPO price of ₹61 per share. This weak start resulted in a loss of ₹13,900 for retail investors who were allotted at least one lot of 2,000 shares (₹6.95 x 2,000).

Despite the disappointing debut, the stock rallied shortly after and hit the 5% upper circuit limit at ₹56.75 per share. This quick recovery offered a silver lining for investors amid a volatile market environment.

Trading highlights: Early activity and market capitalisation

The debut day saw active trading of Onyx Biotec shares, with 6.06 lakh shares exchanging hands within the first 15 minutes. The company’s total market capitalisation stood at ₹102.9 crore, reflecting strong investor interest despite the initial dip.

Onyx Biotec IPO details

The Onyx Biotec IPO raised a total of ₹29.34 crore, comprising a fresh issue of 48.1 lakh shares. The IPO price band was set between ₹58 to ₹61 per share, and the three-day subscription period (from November 13 to November 18) saw overwhelming demand.

Key subscription statistics

• Non-Institutional Investors (NIIs): Subscribed 603.43 times
• Retail Investors: Subscribed 119.36 times
• Qualified Institutional Buyers (QIBs): Subscribed 32.49 times

The IPO’s overall subscription stood at an impressive 198.68 times, underscoring robust investor interest.

Use of IPO proceeds

Onyx Biotec plans to utilise the IPO funds strategically to enhance its production capabilities and operational efficiency. Key allocations include:

• Upgrading the existing manufacturing facility to produce large-volume parenteral solutions for intravenous use.
• Setting up a high-speed carton packaging line at the existing unit.
• Repayment of loans and general corporate purposes.

About Onyx Biotec Limited

Established in May 2005, Onyx Biotec Limited is a pharmaceutical company specialising in sterile water for injections. It also offers contract manufacturing services for Dry Powder Injections and Dry Syrups catering to both domestic and international markets.

The company’s notable clientele includes industry giants such as:

• Hetero Healthcare Limited
• Mankind Pharma Limited
• Sun Pharmaceutical Industries Limited
• Aristo Pharmaceuticals Private Limited
• Macleods Pharmaceuticals Limited
• Mapra Laboratories Private Limited

Share market investment insights

The volatile debut of Onyx Biotec offers valuable lessons for those interested in share market investment. While weak listings may initially seem discouraging, the quick rebound highlights the importance of patience and market understanding.

For investors, IPOs like Onyx Biotec present opportunities to diversify portfolios. However, conducting thorough research and staying updated on market trends is essential for maximising returns from share market investment.