Sai Life Sciences ₹3,043 crore IPO — Check recommendations, price band and more – CNBC TV18
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Unlike the other two IPOs, one of which is a pure fresh issue and the other is a pure Offer For Sale (OFS), Sai Life’s issue is a combination of both.
The IPO is a fresh issue of ₹950 crore, while the OFS component is worth ₹2,093 crore.
Price band of the IPO has been fixed between ₹522 and ₹549 per share, which implies a post-issue market capitalisation of ₹11,420 crore.
From the proceeds of the fresh issue of shares, Sai Life plans to utilise ₹720 crore for repaying its existing dues in part or full. The remaining ₹230 crore will be used for general corporate purposes.
Incorporated in January 1999, Sai Life Sciences is an innovator-focused, contract research, development and manufacturing organisation (CRDMO).
So should investors subscribe to this issue or give it a pass? Here is what some analysts had to say:
Aditya Birla Money recommends “subscribing for the long term”.
The brokerage expects Sai Life Scienecs to benefit from the strong sectoral tailwinds in the $250 billion global CRDMO market.
A reactor capacity of nearly 524 kL and a portfolio of 38 products which support 28 commercial drugs puts the company at an advantage.
Ambiguity over the US Biosecure Act, regulatory action or failure to meet certification standards impacting revenue, are some key risks.
On the other hand, KRChoksey Research has an “Avoid” recommendation for the IPO.
While Sai Life benefits from a robust product pipeline serving over 280 clients, including 18 out of the top 25 Pharma companies globally, its significant reliance on key clients, limited diversification across treatment areas and high infrastructure costs are a risk to its profitability.
This premium valuation of 138x price-to-earnings, along with operational risks and margin pressures limits its attractiveness despite growth potential in the global CRDMO market, the KRChoksey note said.
