Sai Life Sciences IPO day 2: GMP, subscription status, review, and other key details. Apply or not?
The Sai Life Sciences IPO, priced between ₹522 to ₹549 opened for subscription on December 11. The IPO combines the new issuance of equity shares of about ₹950 crore and an offer for sale (OFS) of up to 3.81 crore equity shares by a promoter.
Sai Life Sciences IPO day 2: The initial public offering (IPO) of contract research, development and manufacturing organisation Sai Life Sciences opened for public subscription on Wednesday, December 11. With a price band of ₹522 to ₹549 per share, the issue will remain open till Friday, December 13. Meanwhile, the company raised ₹913 crore from anchor investors ahead of its IPO.
Sai Life Sciences IPO GMP
According to stock market sources, the last grey market premium (GMP) of Sai Life Sciences was ₹40. Considering the upper price band of ₹549, the expected listing price of the stock is ₹589, a premium of 7.3 per cent.
Sai Life Sciences IPO subscription status
By 5 PM on the second day of subscription on Thursday, Sai Life Sciences IPO had seen an overall subscription of 1.25 times, with bids for 4,86,87,885 shares against 3,88,29,848 offered, according to BSE data.
The retail segment had been subscribed 0.42 times, the segment reserved for non-institutional investors (NIIs) was booked 0.59 times, and the qualified institutional buyers (QIB) segment had been subscribed 3.32 times.
On the first day of subscription on Wednesday, Sai Life Sciences IPO saw an overall subscription of 0.84 times, with the segment reserved for retail investors subscribed 0.18 times, the segment reserved for NIIs booked 0.15 times, and the QIBs' segment subscribed 2.62 times.
Sai Life Sciences IPO key details
Let's take a look at 10 key details of the mainboard IPO:
1. Sai Life Sciences IPO price band: Sai Life Sciences IPO price band has been fixed at ₹522-549 per share.
2. Sai Life Sciences IPO date: The book-built issue opened for subscription on December 11 and will remain so until December 13.
3. Sai Life Sciences IPO size: The ₹3,043 crore book-built issue, Sai Life Sciences IPO, combines the new issuance of equity shares of about ₹950 crore and an offer for sale (OFS) of up to 3.81 crore equity shares by promoter, investor shareholders, and various other shareholders.
4. Sai Life Sciences IPO lot size: Investors can bid in lots; one lot comprises 27 shares. This means the minimum investment required by retail investors is ₹14,823.
5. Sai Life Sciences IPO allotment date: The company is expected to finalise the share allotment on Monday, 16 December. Successful bidders will receive shares in their demat accounts on Tuesday, December 17. Refunds for unsuccessful applicants will also be processed on the same day.
6. Sai Life Sciences IPO book-running lead managers and registrar: Kotak Mahindra Capital Company Limited, Jefferies India Private Limited, Morgan Stanley India Company Pvt Ltd, and IIFL Securities Ltd are the book-running lead managers for the Sai Life Sciences IPO. Kfin Technologies Limited serves as the registrar for the issue.
7. Sai Life Sciences IPO listing: Shares of Sai Life Sciences may be listed on the BSE and the NSE on Wednesday, December 18, 2024.
8. Object of the issue: The company intends to use the net proceeds from the issue to repay or prepay certain outstanding borrowings, as well as for general corporate purposes.
9. Sai Life Sciences business overview: Sai Life Sciences is a global player in the contract research, development and manufacturing organisation (CRDMO) segment.
10. Sai Life Sciences financial performance: The company earned a profit after tax (PAT) of ₹82.81 crore in FY24, higher than the PAT of ₹10 crore and ₹6.23 crore in FY23 and FY22, respectively. The company's profit after tax for the six months of FY25 stood at ₹280.12 million.
Sai Life Sciences IPO review
According to the Red Herring Prospectus (RHP) of the company, it provides "end-to-end services across the drug discovery, development, and manufacturing value chain for small-molecule new chemical entities (NCE) to global pharmaceutical innovator companies and biotechnology firms."
Wealth management and investment advisory firm DRChoksey FinServ Private Limited underscored that the company benefits from a robust product pipeline, serving over 280 clients, including 18 of the top 25 global pharmaceutical firms.
However, the wealth management firm pointed out that its significant reliance on key clients, limited diversification across treatment areas and high infrastructure costs pose risks to sustained profitability.
Moreover, it also raises questions about the stretched valuation of the IPO.
"With a P/E (price-to-earnings) multiple of 138 times, the valuation appears stretched compared to peers in the industry. This premium valuation, coupled with operational risks and margin pressures, limits its investment attractiveness despite growth potential in the global CRDMO market. Therefore, we assign an 'avoid' rating," said DRChoksey FinServ, in its report on December 10.
Should you apply or not?
Some experts highlight the issue's stretched valuation and suggest avoiding it for listing gains. However, some appear upbeat about the company's growth prospects and suggest subscribing to the IPO for the long term.
Palak Devadiga, a research analyst at StoxBox, has a 'subscribe' rating on the IPO.
"The company's PAT margin grew from 0.72 per cent in FY22 to 5.65 per cent in FY24, with revenue and EBITDA at 29.8 per cent and 53.4 per cent CAGRs. While the valuation appears high, the company’s strong performance and favourable industry trends make it a promising opportunity for medium to long-term investors. Therefore, we recommend a 'subscribe' rating for this issue," said Devadiga.
Devadiga highlighted that the global CRDMO market, projected at $159 billion by 2028, benefits from rising R&D outsourcing and cost-efficient drug demand. India’s CRDMO market, growing at a 14 per cent CAGR (2023-28), further boosts the sector.
Devadiga believes Sai Life’s strategically located facilities, regulatory approvals (USFDA, PMDA, COFEPRIS), and skilled workforce ensure cost-effective operations.
VLA Ambala, the co-founder of Stock Market Today, pointed out that Sai Life Sciences aims to use the net proceeds from the 950 crore IPO to repay or prepay, in whole or in part, outstanding debts and meet general corporate purposes. This move could enhance its financial stability and support its growth prospects.
"Given the business category, the company is expected to grow significantly. Based on these aspects, I recommend applying for and holding positions in this IPO. Those interested may buy its shares in the secondary market at the proposed price band if they don't receive allotment," said Ambala.
Read all market-related news here
Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.
Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
- Top Gainers
- Top Losers
- 52 Week High