Sai Life Sciences, a well-regarded player in developing small-molecule new chemical entities (NCEs), is set to launch its initial public offering on December 11.
The IPO, which will remain open until December 13, includes a combination of fresh equity shares and an offer-for-sale (OFS).
The IPO aims to raise between Rs 2,940 crore and Rs 3,043 crore. This includes Rs 950 crore through the fresh issue, while the OFS comprises 3.81 crore shares from existing shareholders.
IPO Price Band and Investment Details
The price band for the issue has been set between Rs 522 and Rs 549 per share, with a minimum bid of 27 shares. Retail investors must invest at least Rs 14,823 at the upper price band.
This pricing positions the IPO as an appealing opportunity for investors seeking exposure to the growing pharmaceutical sector, especially in the niche NCE development space.
Key Dates and Allotment Details
The allotment of shares is expected on December 16, and successful applicants will see shares credited to their demat accounts by December 17.
Refunds for unsuccessful applications will also be processed on December 17. Sai Life Sciences shares are scheduled to list on NSE and BSE on December 18.
Allocation for Investors
The IPO allocates 50% of the shares for qualified institutional buyers (QIBs), 35% for retail investors, and 15% for non-institutional investors (NIIs). This structured approach ensures participation across different investor categories.
Planned Use of Proceeds
Sai Life Sciences intends to use the funds raised for several strategic initiatives. Approximately Rs 720 crore from the fresh issue will go toward repaying outstanding debts, which stood at Rs 764.49 crore as of September 2024.
The remainder will fund general corporate expenses and operational enhancements.
Industry Expertise and Growth Prospects
With over a decade of experience, Sai Life Sciences has established itself as a leader in the small-molecule NCE segment.
The company operates as a contract research, development, and manufacturing organization (CRDMO), providing integrated discovery, Chemistry, Manufacturing, and Controls (CMC), and CDMO services to global pharmaceutical innovators.
This focus on end-to-end solutions has enabled Sai Life Sciences to serve a strong client base, underlining its potential for sustained growth in a competitive industry.
Major Stakeholder Exit
TPC Capital, a significant stakeholder with a 38.83% holding, will exit through the IPO.
TPC Capital had invested $135 million in 2018, and its full exit highlights the milestone nature of this offering while raising questions about the company’s post-listing trajectory.
Financial Performance
For the six months ending September 2024, Sai Life Sciences reported revenue of Rs 693.35 crore, an increase from Rs 656.8 crore in the same period last year.
The company also recorded a net profit of Rs 28.01 crore, a turnaround from a loss of Rs 12.92 crore in the prior year.
This financial recovery reflects operational improvements and enhanced profitability.
Market Valuation
At the upper price band, Sai Life Sciences is projected to achieve a market capitalization of Rs 11,400 crore.
This valuation underscores the company’s scale and potential for growth within the pharmaceutical sector.
Risks and Considerations
While the IPO offers a promising investment opportunity, potential investors should be mindful of the inherent risks in the pharmaceutical industry.
Regulatory uncertainties, high competition, and dependency on a niche segment could impact the company’s future performance.
Book-Running Managers
Kotak Mahindra Capital, IIFL Capital Services, Jefferies India, and Morgan Stanley India manage the IPO. Kfin Technologies Limited serves as the registrar. These reputed entities bring credibility and experience to the process.
Sai Life Sciences’ IPO represents a key milestone for the company as it enters the public market. With its focus on innovation, debt reduction, and strategic expansion, the offering has garnered significant attention.
Disclaimer – The information provided in this article is for informational purposes only and should not be construed as investment advice or an endorsement of Sai Life Sciences or its IPO. MarketScope Daily does not provide financial advisory services and is not registered with any regulatory authority. Investors are advised to conduct their own due diligence and consult with financial advisors or legal professionals before making any investment decisions. Past performance or potential projections are not indicative of future results. MarketScope Daily does not assume any liability for decisions made based on this article.
