Sagility India Limited is launching its much-anticipated IPO, aimed at raising ₹2,106.60 crores entirely through an Offer for Sale (OFS) of 7,021.99 lakh shares. This IPO offers retail investors and High-Net-Worth Individuals (HNIs) the chance to invest in a company that specializes in technology-enabled business solutions for clients in the U.S. healthcare sector, specifically health insurance payers and providers. Sagility India provides an in-depth focus on healthcare services, making it an attractive option for investors interested in healthcare and technology solutions. Below is a detailed breakdown of the IPO and whether it presents a sound investment opportunity.

Sagility India IPO: Key Details

• Issue Size: ₹2,106.60 crore, entirely OFS.
• Price Band: ₹28 to ₹30 per equity share.
• Market Capitalization: Expected to be around ₹14,043.98 crore at the upper price band of ₹30.
• Lot Size: 500 shares.
  • Retail Investment: Minimum investment of ₹15,000.
  • HNI Investment: Minimum of 14 lots (7,000 shares) totaling ₹2,10,000.
• Subscription Period: From November 5, 2024, to November 7, 2024.
• Allotment Date: Expected by November 8, 2024.
• Listing Date: Tentatively set for November 12, 2024, on BSE and NSE.
• Registrar: Link Intime India Private Limited.

Book-Running Lead Managers
The IPO is being managed by ICICI Securities Limited, IIFL Securities Limited, Jefferies India Private Limited, and J.P. Morgan India Private Limited.

Sagility India’s Business Model and Client Base

Sagility India provides healthcare-focused services to clients in the U.S. healthcare industry, including:

• Payers: Health insurance companies in the U.S. that finance and reimburse healthcare costs.
• Providers: Hospitals, physicians, diagnostic facilities, and medical device companies.

Sagility's specialized technology solutions streamline healthcare operations, benefiting clients by enhancing efficiency and reducing costs in service delivery. As a pure-play healthcare service provider, Sagility stands out with its targeted approach in a high-demand sector.

Financial Highlights

Sagility India's financial performance over recent fiscal years underscores its growth trajectory:

• Revenue Growth: The company recorded revenues of ₹47,815.04 million in FY2024, ₹42,360.60 million in FY2023, and ₹9,443.94 million in FY2022.
• EBITDA: ₹11,160.37 million in FY2024, ₹10,448.64 million in FY2023, and ₹2,105.72 million in FY2022.
• Profit After Tax (PAT): ₹2,282.66 million in FY2024, up from ₹1,435.72 million in FY2023, showing a positive growth trend. However, the company reported a loss of ₹-46.71 million in FY2022.

Sagility’s profitability metrics are on the rise, and its Return on Equity (RoE) of 3.54% for FY2024 reflects a modest but steady growth trajectory.

Valuation Metrics

• EPS (Earnings Per Share): Pre-issue EPS is ₹0.53, while post-issue EPS is estimated at ₹0.48.
• Price-to-Earnings (P/E) Ratio: Pre-issue P/E is 56.6x, with a post-issue P/E of 62.5x, suggesting a valuation that is relatively high compared to industry averages.

IPO Objectives

Sagility India intends to use the proceeds from this IPO primarily for the following:

1. Listing benefits: Aimed at enhancing liquidity for shareholders.
2. Offer for Sale: The entire issue size is an OFS, with no new capital being raised for corporate expansion.

Grey Market Premium (GMP)

Currently, Sagility India's IPO shows a Grey Market Premium (GMP) of ₹0, indicating limited pre-listing trading activity. The GMP can be a speculative measure, often reflective of anticipated listing gains, though it has no guaranteed impact on actual stock performance post-listing.

Anchor Investor Participation

Sagility India raised ₹945.40 crores from anchor investors, who subscribed at the upper price band of ₹30 per share. A total of 31,513,466 equity shares were allocated to these anchor investors, providing Sagility with pre-IPO support and additional market visibility.

Note: Anchor investments contribute toward the Qualified Institutional Buyers (QIB) reservation portion, providing a confidence boost in the company’s market credibility.

Subscription Status

On the first day of the IPO subscription period, Sagility India was subscribed 0.22 times. Real-time subscription data can be checked on the BSE website for those interested in following the daily progress.

How to Check Sagility India IPO Allotment Status

Once the allotment is finalized, investors can check their allotment status through the Link Intime India Private Limited website using the following steps:

1. Visit the IPO allotment status page on the Link Intime website.
2. Select "Sagility India Limited IPO" from the dropdown menu.
3. Enter your application number, PAN, or DP Client ID.
4. Submit the details to view your allotment status.

This straightforward process allows investors to verify their allotment results quickly.

Recommendation: Should You Invest?

Sagility India's IPO comes with a balanced set of factors to consider:

1. Strengths:

   • Pure-play healthcare focus, tapping into the U.S. healthcare market with established client relationships.
   • Positive revenue and profit growth, with a strong market presence.

2. Concerns:

   • The IPO is entirely an Offer for Sale, meaning no capital is being raised for company expansion or debt reduction.
   • High P/E ratios relative to industry averages may suggest a stretched valuation.
   • Limited Grey Market Premium, indicating low speculative interest.

3. Investment Potential:
   While Sagility India's focus on healthcare services positions it favorably in a growing sector, the IPO’s high valuation and limited upside as indicated by GMP suggest a cautious approach. Investors interested in long-term healthcare sector growth may find value, but those seeking listing gains may consider other options.

Final Verdict: Avoid for listing gains but consider for long-term if confident in the company's sector growth and operational resilience.

Sagility India's IPO presents an in-depth look at the U.S. healthcare services market and offers investors the chance to gain exposure to a niche industry. By weighing the company's financial performance, sector potential, and valuation metrics, investors can make an informed decision on their participation in this IPO.

The Upcoming IPOs in this week and coming weeks are Archit Nuwood Industries Limited, Swiggy, ACME Solar Holdings, Sagility India, Neelam Lines and Garments, Niva Bupa Health, Rosmerta Digital, NTPC Green, Avanse Financial.

The Current active IPO is Sagility India Limited.

For more insights into financial trends , visit our Top News Headlines. You can also explore investment opportunities in the market and apply for upcoming IPOs through our Best IPO to Apply Now section.