Sai Life Sciences Limited, a leading contract research, development, and manufacturing organization (CRDMO), is set to launch its IPO, opening on December 11, 2024. The price band for the Sai Life Sciences IPO is ₹522 to ₹549 per equity share, with the company offering a fresh issue of 173.04 lakh shares worth ₹950 crores and an offer for sale of 381.16 lakh shares totaling ₹2,092.62 crores. The subscription period runs from December 11 to December 13, 2024, and the allotment is expected to be finalized on December 16, 2024, with the listing set for December 18, 2024.

Sai Life Sciences has emerged as the fastest-growing CRDMO in India, with impressive revenue CAGR and EBITDA CAGR from FY22 to FY24. The company collaborates with over 280 global pharma and biotech firms, accelerating the discovery, development, and commercialization of small molecule programs. Their financials have seen a significant upward trend, with revenues reaching ₹14,942.69 million in FY24, and EBITDA hitting ₹2,881.55 million in the same period.

The Grey Market Premium (GMP) for Sai Life Sciences IPO as of December 13, 2024, stands at ₹48, which indicates a potential listing gain of 8.66% based on the IPO price. While the GMP can provide a glimpse into the demand for the IPO, it's important to remember that trading in the grey market is unregulated, and actual market behavior can differ once shares are listed on exchanges like the BSE and NSE.

The Sai Life Sciences IPO subscription has been strong, with the issue being subscribed 10.26 times on the final day of the subscription period. This robust demand signals investor confidence in the company's growth trajectory and its financial performance. The IPO lot size is 27 shares, with retail investors required to invest a minimum of ₹14,823. High-Net-Worth Individuals (HNIs) must invest in a minimum of 14 lots (378 shares), totaling ₹2,07,522.

Sai Life Sciences Limited aims to utilize the proceeds from its fresh issue for the repayment of outstanding borrowings and for general corporate purposes. This will strengthen the company’s balance sheet and support its ongoing operations and expansion.

The IPO valuation is considered fully priced, with a pre-issue EPS of ₹4.53 and a post-issue EPS of ₹0.40, placing the company at a P/E ratio of 121.19x before the issue and 136.21x post-issue. This is higher than the industry average P/E of 95.33x, suggesting that the IPO may be priced at a premium compared to industry standards.

Given the company’s strong financials, high subscription rates, and the potential listing gain indicated by the GMP, the Sai Life Sciences IPO presents an attractive opportunity for investors looking to participate in a fast-growing CRDMO in India. However, given the high valuation, it may be more suitable for long-term investors than for those looking for short-term listing gains.

The Upcoming IPOs in this week and coming weeks are Identical Brain Studios, Transrail Lighting, Mamata Machinery, DAM Capital  Sanathan Textiles, Concord Enviro, Newmalayan Steel, Ventive Hospitality, Senores Pharmaceuticals, Carraro India, Solar91 Cleantech, Unimech Aerospace, Rosmerta Digital, Indo Farm, and Avanse FinancialThe Current active IPO is NACDAC Infrastructure, International Gemmological and Hamps Bio.

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