The Sai Life Sciences IPO is set to open for subscription on December 11, 2024, with the price band fixed between ₹522 to ₹549 per share. As one of the fastest-growing contract research, development, and manufacturing organisations (CRDMOs) in India, Sai Life Sciences is a key player in the global pharmaceutical and biotech industry. The company works with over 280 international companies to enhance the discovery, development, and commercialization of new chemical entities (NCEs).

IPO Details

Sai Life Sciences' IPO is a Book Built Issue valued at ₹3,042.62 Crores. It includes a Fresh Issue of 173.04 lakh shares, amounting to ₹950.00 Crores, and an Offer for Sale (OFS) of 381.16 lakh shares, totaling ₹2,092.62 Crores. The subscription will remain open until December 13, 2024, and the allotment will be finalized by December 16, 2024, with listing expected around December 18, 2024.

Financial Overview

For fiscal years 2022, 2023, and 2024, Sai Life Sciences showed consistent revenue growth, reaching ₹14,942.69 million in FY24, up from ₹12,451.05 million in FY23 and ₹8,977.41 million in FY22. Similarly, the company’s EBITDA increased significantly from ₹1,459.58 million in FY22 to ₹2,881.55 million in FY24. Additionally, the profit after tax (PAT) surged to ₹828.09 million in FY24, from ₹99.89 million in FY23.

Investment Considerations

The P/E ratio for the IPO stands at 121.19x on a pre-issue basis and 136.21x post-issue, compared to the industry average of 95.33x. Given the high valuation and the Grey Market Premium (GMP) showing a 0% potential listing gain, investors are advised to exercise caution. The Return on Capital Employed (ROCE) for FY24 stands at 10.26%, and Return on Equity (RoE) is 8.49%, both of which reflect the company’s relatively modest performance when compared to industry peers.

Purpose of the IPO Proceeds

Sai Life Sciences plans to use ₹7,200 million from the IPO to repay outstanding borrowings and for general corporate purposes, which will aid in strengthening its financial position.

Sai Life Sciences IPO GMP and Listing Trends

As of December 6, 2024, the Grey Market Premium (GMP) for the Sai Life Sciences IPO is ₹0, signaling no expected listing gains based on current financials. This suggests that the listing price will likely align closely with the issue price, with no major price hike anticipated.

How to Check Allotment Status

To check your Sai Life Sciences IPO allotment status, visit the registrar’s website starting from December 16, 2024. Simply select the Sai Life Sciences IPO from the dropdown, enter your PAN or application number, and submit to check your status.

Final Thoughts

Despite Sai Life Sciences' strong revenue growth and industry position, the GMP and high valuation raise concerns about its potential for short-term gains. Based on these factors, we recommend that investors avoid this IPO if seeking quick listing gains or long-term investment.

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

The Current active IPO is Emerald Tyre Manufacturers.

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