Sudeep Pharma IPO Day 2 Highlights: GMP signals listing pop of 20%; issue booked 5.09x — Should you apply?

Sudeep Pharma IPO was subscribed 5.09 times so far on the second day of the booking. Here's how different quotas were booked:

QIB: 13%

NII: 12x

Retail: 4.97x

The company is a technology-led manufacturer of excipients* and specialty ingredients for the pharmaceutical, food and nutrition industries. It has established a presence in both domestic and international markets, including key regions such as the United States, South America, Europe, the Middle East, Africa, and Asia-Pacific.

The company operates three manufacturing facilities in Vadodara, Gujarat as of June 30, 2025. Further, pursuant to its acquisition of NSS as a Material Subsidiary with effect from May 22, 2025, it also has a manufacturing facility in Ireland.

Sujit Jaysukh Bhayani - Promoter Selling Shareholder

• Up to 3,567,670 equity shares of face value ₹1

Sujeet Jaysukh Bhayani HUF - Promoter Selling Shareholder

• Up to 8,418,856 equity shares of face value ₹1

Shanil Sujit Bhayani - Promoter Selling Shareholder

• Up to 750,000 equity shares of face value ₹1

Avani Sujit Bhayani - Promoter Selling Shareholder

• Up to 754,200 equity shares of face value ₹1

Sudeep Pharma IPO was subscribed 4.37 times so far on the second day of the booking. Here's how different quotas were booked:

QIB: 13%

NII: 9.84x

Retail: 4.49x

Expand into high-growth businesses: The company, through its subsidiary SAMPL, is setting up a facility to produce battery-grade iron phosphate (EcoCath) for EVs and energy storage, leveraging its infrastructure and eco-friendly processes to scale sustainably.

Expand market reach through multiple growth initiatives: Leverage USFDA-approved capabilities for expansion in regulated markets, expand market reach with Lipoboost liposomal ingredients and Novelcap encapsulated products, and capitalize on government-led public health initiatives for large-scale fortification.

Develop customized solutions and enter into strategic partnerships to drive growth.

Integrate recently acquired entities and continue evaluating inorganic growth opportunities.

Enhance manufacturing capabilities.

India’s food and nutritional ingredients market is rapidly expanding, driven by increasing health awareness, a growing population, and rising disposable incomes. In 2024, India’s demand for food ingredients is estimated to be around $22 billion. The market is expected to grow at a CAGR of 8.1% between 2024 and 2029, with demand reaching $32 billion in 2029.

In India, vitamins and minerals are integral components of dietary supplements, often recommended by healthcare professionals to complement treatment for a variety of health conditions, ranging from mild to chronic illnesses. The Vitamins and Minerals market in India, currently valued at $2.1 billion in 2024, is set for significant growth. Forecasts predict robust growth at a CAGR of 8% from 2024 to 2029, with the market expected to reach around $3.0 billion by 2029.

The domestic pharmaceutical industry is projected to reach $130 billion by 2030 and $450 billion by 2047. India’s food and nutritional ingredients market, valued at $22 billion in 2024, is expanding rapidly on the back of rising health awareness, urbanization, and a growing middle-income population. The sector is expected to grow at a CAGR of 8.1% to reach $32 billion by 2029.

Sudeep Pharma Ltd is strategically positioned to capitalize on this rapid expansion across the pharmaceutical, food, nutrition, and specialty ingredients markets. With a technology-driven manufacturing ecosystem, in-house process capabilities, and a diversified portfolio of over 100 products, the company is well aligned with the sector’s evolving needs. Investors may consider the IPO as a potential long-term investment opportunity.

The company operates three manufacturing facilities in Vadodara, Gujarat with a combined annual capacity of 65,579 MT and an additional facility in Ireland acquired through NSS in May 2025.

The company plans to use the net proceeds from fresh share sale for:

• Capital expenditure towards procurement of machinery for the production

line located at Nandesari Facility I.

• General corporate purposes.

Sudeep Pharma IPO size stands at ₹895 crore ( ₹95 crore fresh + ₹800 crore OFS) with a price band of ₹563– ₹593. At the upper band, valuations translate to roughly 46× FY24 EPS (~ ₹12.78) and a P/B of ~17.9× against a NAV of ₹33.10 per share. Although the company delivered a strong ~37% ROE, the multiple sits well above typical speciality-chemical and ingredient peers, which generally trade in the 15–25× earnings range depending on scale, diversification, and regulatory risk.

Sudeep’s strengths lie in its export dependence, certifications, and ability to integrate into regulated pharma supply chains, supported by low leverage and improving profitability. However, client concentration remains elevated, working-capital intensity has increased, and the planned 50,000 MT capacity expansion by FY26 must translate into tangible revenue growth to justify current valuations. The business is fundamentally strong with a differentiated niche, but the pricing already reflects high expectations—leaving limited room for error and making execution over the next 12–24 months the key determinant of investor returns.

— Views by Harshal Dasani, Business Head, INVAsset PMS

• Strong R&D drives innovation and product advancement.
• Experienced leadership with deep industry and functional expertise.
• Advanced, compliant facilities with global certifications and scalable capacity.
• Long-standing relationships with global blue-chip and Fortune 500 customers.
• Market leader with a diversified portfolio in a high-entry-barrier ingredients industry.

Shri. Sujit Jaysukh Bhayani, Shri. Shanil Sujit Bhayani, Smt. Avani Sujit Bhayani, Sujeet Jaysukh Bhayani HUF, Riva Resources Private Limited and Bhayani Family Trust are the promoters of the company. As on date of this Red Herring Prospectus, the Promoters collectively hold 99,503,523 Equity Shares of face value of ₹1 each, equivalent to 89.37% of the issued, subscribed and paid-up equity share capital of the Company.

As of the date of this Red Herring Prospectus, the Board comprises seven Directors, of which three are Whole-time Directors and four are Independent Directors (including a woman Independent Director).

• The company delivers robust performance with rising revenues, high EBITDA margins, and an impressive FY25 RONW of 27.88%.
• It operates as a preferred partner for critical pharma-grade ingredients, serving a solid roster of marquee global customers.
• The issue is considered “aggressively priced” at a P/E of 45–48x, fully capturing its current stable profitability.
• This steep valuation leaves very little room for immediate listing gains or short-term “pops.”
• Aggressive investors are advised to apply only if they have a holding horizon of 2–5 years.

As of June 30, 2025, the company serves over 1,100 customers spread across around 100 countries.

SPL’s largest export markets are in the USA, Europe, APAC, and Africa regions. In the three months ended June 30, 2025, the export sales accounted for 58.68% of the revenue from operations.

As of June 30, 2025, the company has served over 1,100 global customers across the pharma, food, nutrition, and FMCG sectors, including marquee names like Pfizer, Merck, and Danone. The marquee customers include Pfizer Inc., Intas Pharmaceuticals Limited, Mankind Pharma Limited, Merck Group, Alembic Pharmaceutical Limited, Aurobindo Pharma Limited, Cadila Pharmaceutical Limited, IMCD Asia Pte. Ltd., Micro Labs Limited, and Danone S.A.

As of June 30, 2025, the company operates in two business verticals: Pharmaceutical, Food and Nutrition Specialty Ingredients

This comprises a portfolio of more than 100 products, including excipients, APIs, mineral actives, and specialty ingredients and formulations with brands, such as Presscal, Pressmag, Lubriprez, A-comprez, Novelcap, Lipoboost, and Cuvamix.

Pharmaceutical, Food and Nutrition Business

The company supplies essential mineral-based ingredients—such as calcium, zinc, and iron—for pharmaceutical formulations and as nutritional fortifiers in food and dietary products, supporting health and regulatory compliance.

Specialty Ingredients Business

Through its Indian material subsidiary, SNPL, the company develops specialty ingredients for food, nutrition, pharmaceutical, and health supplement sectors, offering encapsulated ingredients, liposomal products, premixes, granulates, spray-dried powders, and triturates.

Sudeep Pharma IPO opened for the second day of bidding today at 10 am. Investors can place their bids till 5 pm today. The issue sailed through on the first day itself amid strong NII and retail demand. The GMP remains steady at 20%.

At the upper price band of ₹593, SPL is available at a P/E of 48x (FY25 diluted basis), which appears to be fairly priced. The company is well-positioned for sustained long-term growth, supported by robust operational performance, NSS acquisition that strengthens its European footprint in infant nutrition and formulations and its planned foray into the high-growth battery-grade minerals segment.

Coupled with a strong balance sheet, dedicated R&D focus, and continued product innovation, SPL presents a compelling long-term story. We therefore assign a SUBSCRIBE rating for investors with a medium- to long-term investment horizon.

— Views from Geojit Financial

The initial public offer of Sudeep Pharma Ltd got fully subscribed on the first day of share sale on Friday.

The IPO received bids for 1,50,09,425 shares, as against 1,05,64,926 shares on offer, translating into 1.42 times subscription, as per NSE data.

The category for non-institutional investors fetched 3 times the subscription, while the quota for Retail Individual Investors (RIIs) got subscribed 1.50 times. The portion for Qualified Institutional Buyers (QIBs) attracted 9 per cent subscription.

The latest grey market premium (GMP) for Sudeep Pharma IPO is ₹121. With the IPO’s price band capped at ₹593, the estimated listing price stands at ₹714. This implies an expected gain of 20.40% per share on listing.