Sai Life Sciences Limited, a leading Contract Research, Development, and Manufacturing Organization (CRDMO), is set to launch an IPO of ₹3,042.62 Crores. This consists of a Fresh Issue of 173.04 Lakh Shares worth ₹950.00 Crores and an Offer for Sale (OFS) of 381.16 Lakh Shares totaling ₹2,092.62 Crores. The IPO will open for subscription from December 11, 2024 to December 13, 2024, with a price band set between ₹522 and ₹549 per equity share. The listing date is tentatively scheduled for December 18, 2024 on both the BSE and NSE.

Company Overview

Sai Life Sciences is the fastest-growing CRDMO in India, offering a full spectrum of services to accelerate the development and commercialization of New Chemical Entities (NCEs) for over 280 global pharma and biotech companies. The company's capabilities span:

• Contract Research
• Contract Development
• Contract Manufacturing

Sai Life Sciences plays a vital role in advancing pharmaceutical programs and is recognized for its contributions to the small molecule drug development sector.

Financial Performance

Sai Life Sciences has shown impressive growth in terms of revenue and EBITDA:

• Revenue for FY 2024: ₹14,942.69 Million
• EBITDA for FY 2024: ₹2,881.55 Million
• Profit After Tax (PAT) for FY 2024: ₹828.09 Million

Despite consistent growth in revenue and EBITDA, the EPS growth has been limited, with a pre-issue EPS of ₹4.53 and a post-issue EPS of ₹0.40. The pre-issue P/E ratio stands at 121.19x, and the post-issue P/E ratio is 136.21x, which is higher than the industry P/E ratio of 95.33x. These ratios suggest that the IPO is fully priced.

Grey Market Premium (GMP) and Listing Trend

Currently, the Grey Market Premium (GMP) for Sai Life Sciences IPO is ₹0, indicating no expected listing gains. The IPO GMP trend is as follows:

• 6 December 2024: ₹0 (expected listing price ₹549)

Given this, the lack of a GMP premium suggests that the demand for the IPO is muted, and investors should temper expectations regarding potential listing gains.

IPO Subscription and Allotment Process

The Sai Life Sciences IPO will be open for subscription from December 11, 2024, to December 13, 2024. The IPO allotment date is scheduled for December 16, 2024. To check the allotment status, follow these steps:

1. Visit the IPO allotment status page.
2. Select Sai Life Sciences Limited IPO from the dropdown.
3. Enter your application number, PAN, or DP Client ID.
4. Submit the details to view your allotment status.

Objectives of the IPO

The proceeds from the Fresh Issue will be used for:

1. Repayment/prepayment of borrowings: ₹7,200.00 Million
2. General corporate purposes
   
   

   The Upcoming IPOs in this week and coming weeks are Jungle Camps, Toss The Coin, Sai Life Sciences, Mobikwik, Vishal Mega Mart, Supreme Facility, Purple United, Yash Highvoltage, International Gemmological, Inventurus Knowledge, Rosmerta Digital and Avanse Financial.

   The Current active IPO is Dhanlaxmi Corp and Emerald Tyre Manufacturers.

IPO Review

Sai Life Sciences is a leading CRDMO, but the IPO is priced at a premium valuation compared to its peers. The high P/E ratio and the low expected EPS growth suggest that the IPO is fully priced and may not provide significant listing gains or long-term growth potential.

The 0% GMP further supports the notion that the IPO may not yield substantial short-term gains. For investors seeking long-term investment opportunities, the current valuation and limited growth prospects in the near term may make the IPO less attractive. Therefore, we recommend avoiding the Sai Life Sciences IPO for both listing gains and long-term investment.

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