Glenmark Life Sciences IPO allotment status and capital gain tax on selling shares in IPO allotment

Incorporated in 2011, Glenmark Life Sciences is the leading manufacturer of Active Pharmaceutical Ingredients (APIs). The company develops, manufactures, and supplies high-quality APIs for cardiovascular disease (CVS), central nervous system disease (CNS), pain management, and diabetes, gastrointestinal disorders, anti-infectives, and other therapeutic areas. It further operates in Contract Development and manufacturing operations (CDMO) to offer services to specialty Pharmaceutical companies.

Its products are being sold in India and also exported to multiple countries i.e. Europe, North America, Latin America, Japan, etc. Currently, it has 4 manufacturing facilities at Ankleshwar and Dahej in Gujarat and Mohol and Kurkumbh in Maharashtra State with an aggregate annual installed capacity of 725.8 KL as of December 31, 2020.

Company Financials:

Summary of financial Information (Restated Consolidated)
Particulars	For the year/period ended (₹ in million)
	31-Mar-21	31-Mar-20	31-Mar-19
Total Assets	19,970.75	17,256.04	14,753.95
Total Revenue	18,859.76	15,493.03	8,868.65
Profit After Tax	3,515.81	3,130.98	1,955.92

Objects of the Issue:

To make payment of outstanding purchase consideration to the promoter for the spin-off of the API business from the promoter into the company.
To finance capital expenditure requirements.
To meet general corporate purposes.

Glenmark Life Sciences IPO Subscription Status (Bidding Detail)

The Glenmark Life Sciences IPO is subscribed 44.17x times on Jul 29, 2021. The public issue subscribed 14.63x in the retail category, 36.97x in the QIB category, and 122.54x in the NII category.

Category	IPO Subscription
QIB	36.97x
NII	122.54x
RII	14.63x
Total	44.17x

Here are the steps that investors can take to view the Glenmark IPO allotment status:

For BSE

Step 1: Visit the official website https://www.bseindia.com/investors/appli_check.aspx

Step 2: On the homepage, select the issue type and issue name.

Step 3: Enter your application number and PAN. Now clear the security check and click on search.

Step 4: Your IPO allotment status will be displayed.

For KFin Tech

Step 1: Visit the website kosmic.kfintech.com.

Step 2: On the homepage, select IPO and application type.

Step 3: Now type in your application number and security key. Click on submit.

Step 4: Your share allotment status will be displayed on screen.

Capital gain tax on sale of shares received in IPO allotment:

Now, let’s talk about the taxability of gain earned if the shares are sold on the listing date itself to get listing gain by way of premium on listing and if the same is sold after some time.

There can be two types of gain’s: (i) long term or (ii) short term.

Since the shares are going to be listed on stock exchange hence, if the shareholder sell such shares on the recognised stock exchange, such shares will be considered as long term asset if they are held for more than one year and will be considered as short term if they are held for a period less than 1 year.

The taxability of such shares will be calculated based on section “111A for short term gain” and “112A for long term gain” wherein tax rate of short term gain is 15% of the gain and for long term gain the tax rate is 10% of the gain amount.

Looking at the current scenario we know that many people sell their shares on the listing day itself to earn the listing premium and hence the gain earned by such transaction will be considered as short term capital gain as the assessee held shares for less than one year period and hence he/ she shall be liable to pay tax at the rate of 15% on such gain under section 111A of the Income tax Act.

However if the shareholder holds the share for more than one year from the date of listing as the specialty chemical sector is likely to see boom in next year then he or she shall be liable to pay tax at the rate of 10% on the gain amount under section 112A of the Income tax Act.

Further, for long term capital gain no tax needs to be paid on the initial Rs. 1 lakh gain u/s 112A of the Income tax Act and no benefit of indexation will be available in case of long term gain since the shares are listed and sold on recognized stock exchange.

In case of long term capital gain one can claim exemption u/s 54F by investing the entire sale consideration in a new residential house and if the conditions mentioned under section 54F are fulfilled, other than section 54F there are no other way to save capital gain tax.

Also, the tax rates mentioned above are just base rates and surcharge and cess will also be added accordingly on such tax rates.

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