Sai Life Sciences IPO day 1: The preliminary public providing (IPO) of contract analysis, growth and manufacturing organisation Sai Life Sciences has opened for public subscription in the present day, i.e., Wednesday, December 11. With a value band of ₹522 to ₹549 per share, the problem will stay open until Friday, December 13. The corporate is anticipated to finalise share allotment on Monday, 16 December. Profitable bidders will obtain shares of their demat accounts on Tuesday, December 17. Refunds for unsuccessful candidates can even be processed on the identical day. In the meantime, the corporate raised ₹913 crore from anchor traders forward of its IPO.
Sai Life Sciences IPO GMP
In line with inventory market sources, the final gray market premium (GMP) of Sai Life Sciences was ₹31. Contemplating the higher value band of ₹549, the anticipated itemizing value of the inventory is ₹580, a premium of almost 6 per cent.
Sai Life Sciences IPO subscription standing
Sai Life Sciences IPO subscription standing will likely be up to date after 10 am.
The ₹3,043 crore book-built challenge, Sai Life Sciences IPO, combines the brand new issuance of fairness shares of about ₹950 crore and a proposal on the market (OFS) of as much as 3.81 crore fairness shares by a promoter, investor shareholders, and varied different shareholders.
The corporate intends to make use of the web proceeds from the problem to repay or prepay sure excellent borrowings, in addition to for basic company functions.
Kotak Mahindra Capital Firm Restricted, Jefferies India Personal Restricted, Morgan Stanley India Firm Pvt Ltd, and IIFL Securities Ltd are the book-running lead managers for the Sai Life Sciences IPO. Kfin Applied sciences Restricted serves because the registrar for the problem.
Sai Life Sciences IPO evaluation
Sai Life Sciences is a world participant in contract analysis, growth and manufacturing organisation (CRDMO) section. In line with the Crimson Herring Prospectus (RHP) of the corporate, it offers “end-to-end providers throughout the drug discovery, growth, and manufacturing worth chain for small-molecule new chemical entities (NCE) to world pharmaceutical innovator corporations and biotechnology companies.”
The corporate earned a revenue after tax (PAT) of ₹82.81 crore in FY24, greater than the PAT of ₹10 crore and ₹6.23 crore in FY23 and FY22, respectively. The corporate’s revenue after tax for the six months of FY25 stood at ₹280.12 million.
Wealth administration and funding advisory agency DRChoksey FinServ Personal Restricted underscored that the corporate advantages from a strong product pipeline, serving over 280 purchasers, together with 18 of the highest 25 world pharmaceutical companies.
Nonetheless, the wealth administration agency identified that its important reliance on key purchasers, restricted diversification throughout remedy areas and excessive infrastructure prices pose dangers to sustained profitability.
Furthermore, it additionally raises questions concerning the stretched valuation of the IPO.
“With a P/E (price-to-earnings) a number of of 138 instances, the valuation seems stretched in comparison with friends within the business. This premium valuation, coupled with operational dangers and margin pressures, limits its funding attractiveness regardless of development potential within the world CRDMO market. Due to this fact, we assign an ‘keep away from’ score,” mentioned DRChoksey FinServ, in its report on December 10.
Must you apply or not?
Some consultants spotlight the problem’s stretched valuation and counsel avoiding it for itemizing positive factors. Nonetheless, some seem upbeat concerning the firm’s development prospects and counsel subscribing to the IPO for the long run.
Palak Devadiga, a analysis analyst at StoxBox, has a ‘subscribe’ score on the IPO.
“The corporate’s PAT margin grew from 0.72 per cent in FY22 to five.65 per cent in FY24, with income and EBITDA at 29.8 per cent and 53.4 per cent CAGRs. Whereas the valuation seems excessive, the corporate’s sturdy efficiency and beneficial business tendencies make it a promising alternative for medium to long-term traders. Due to this fact, we suggest a ‘subscribe’ score for this challenge,” mentioned Devadiga.
Devadiga highlighted that the worldwide CRDMO market, projected at $159 billion by 2028, advantages from rising R&D outsourcing and cost-efficient drug demand. India’s CRDMO market, rising at a 14 per cent CAGR (2023-28), additional boosts the sector.
Devadiga believes Sai Life’s strategically positioned amenities, regulatory approvals (USFDA, PMDA, COFEPRIS), and expert workforce guarantee cost-effective operations.
VLA Ambala, the co-founder of Inventory Market At the moment, identified that Sai Life Sciences goals to make use of the web proceeds from the 950 crore IPO to repay or prepay, in entire or partly, excellent money owed and meet basic company functions. This transfer may improve its monetary stability and help its development prospects.
“Given the enterprise class, the corporate is anticipated to develop considerably. Based mostly on these features, I like to recommend making use of for and holding positions on this IPO. These might purchase its shares within the secondary market on the proposed value band if they do not obtain allotment,” mentioned Ambala.
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Disclaimer: The views and suggestions above are these of particular person analysts, consultants, and brokerage companies, not Mint. We advise traders to seek the advice of licensed consultants earlier than making any funding choices.
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