Sai Parenteral’s IPO: The initial public offering (IPO) of pharmaceutical company Sai Parenteral’s Ltd opened for public subscription on Tuesday, March 24, and will close on Friday, March 27.
Sai Parenteral’s IPO price band has been set at ₹372 to ₹392 per share. The IPO lot size is 38 shares, and the minimum investment amount required by a retail individual investor is ₹14,896.
At the upper-end of the IPO price band, the company aims to raise ₹408.79 crore from the book-building issue, which is a combination of fresh issue of 72.70 lakh equity shares worth ₹285 crore, and an offer-for-sale (OFS) of 31.57 lakh shares amounting to ₹123.79 crore.
The company proposes to utilise the net issue proceeds for capacity expansion and upgradation of manufacturing facilities, establishment of a new R&D Centre, repayment or prepayment of certain outstanding borrowings, working capital requirements, investment in wholly owned subsidiary, Sai Parenterals Pte Limited (Singapore), in relation to the proposed acquisition of Noumed Pharmaceuticals Pty Limited (Australia), and for general corporate purposes.
Sai Parenteral’s IPO allotment date is likely March 30, Monday, and the tentative IPO listing date is April 2, Thursday.
Arihant Capital Markets Ltd. is the book running lead manager and Bigshare Services Pvt. Ltd. is Sai Parenteral’s IPO registrar.
Sai Parenteral’s IPO Subscription Status
Sai Parenteral’s IPO has been subscribed 2% so far till 12:40 PM on Tuesday, the first day of the bidding process, NSE data showed.
The Retail Individual Investors (RIIs) segment was booked 2%, while the Non Institutional Investors (NII) category was subscribed 5%. The Qualified Institutional Buyers (QIBs) are yet to bid for the IPO.
Sai Parenteral’s IPO GMP Today
Sai Parenteral’s shares are not commanding any grey market premium (GMP). According to websites tracking the grey market, Sai Parenteral’s IPO GMP today is ₹0 per share. This signals that in the grey market, Sai Parenteral’s shares are trading without any premium or discount to their issue price.
Sai Parenteral’s IPO GMP today indicates that the stock is trading at ₹392 apiece in the grey market, which is equal to its issue price of ₹392 per share.
Should you apply for Sai Parenteral’s IPO?
Sai Parenteral’s operates in the Branded Generic Formulations and CDMO businesses, with the product portfolio covering both high-value and high-volume categories across various therapeutic areas. The company’s offerings span across dosage forms such as injectables, tablets, capsules, liquid orals and ointments.
Of these, the injectables dosage is a high margin segment for the company, and it plans to increase the share of injectables in the total revenue mix in the coming years.
“At the upper price band of ₹392, Sai Parenteral’s IPO is valued at FY25 (proforma) P/E and EV/EBITDA multiples of 88.2x/46.3x respectively based on post-issue capital, which appears to be at premium to its peers. However, we believe Noumed’s 451 dossiers offer a huge growth opportunity for Sai Parenteral’s Ltd,” said SBI Securities.
Hence, the brokerage firm recommends investors to subscribe to the Sai Parenteral’s IPO at the cut-off price for a long-term investment horizon.
According to Swastika Investmart, at a pre-IPO P/E of 72.19x and ROCE of only 9.28%, the valuation appears stretched. Peers like Innova Captab trade at 32.45x and Gland Pharma at 44.71x with significantly higher scale and earnings.
“The business fundamentals and growth trajectory are solid, but the P/E of 72x is expensive for a company of this size and ROCE. The company entered export markets in FY2023 and currently supplies to Australia, New Zealand, Southeast Asia, the Middle East and Africa, with WHO-GMP and TGA-accredited facilities, which supports a long-term growth thesis,” said the brokerage firm.
According to Swastika Investmart, investors seeking short-term or listing gains should avoid the IPO.
“Risk-reward is unfavorable. Better opportunities exist in the pharma sector at more reasonable valuations,” it said.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
