Sai Life Sciences IPO opened on December 11 aims to raise Rs 3,042.62 crore through a combination of fresh shares and offer for sale. The OFS has a bigger share in the issue, with Rs 2,092.62 crore going to the pockets of promoters and other selling shareholders. While the money raised through fresh shares will be used by the company to repay its outstanding borrowings. Also, the company rely heavily on international revenues, facing a risk of operational delays.
“When annualized FY25 earnings are attributed to its post-IPO fully diluted paid-up equity capital, the asking price results in a price-to-earnings (P/E) ratio of 204.09. Based on FY24 earnings, the P/E ratio stands at 137.94, indicating that the issue is aggressively priced,” said Bajaj Broking in an IPO note.
The company reported a net profit of Rs 6.23 crore in FY22, Rs 9.99 crore in FY23, and Rs 82.81 crore in FY24. This significant rise in net profit starting from FY24 has raised some concerns, said Bajaj Broking.
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That’s why the company is trading at a premium of a mere 5% in the grey market when other IPOs launched on the same date are attracting as much as 49% GMP. This indicates that the stock might see a positive to at-par listing with the issue price, around Rs 580. The grey market is an unregulated place to trade shares ahead of listing.
Sai Life Sciences IPO details
The IPO closes on December 13. The allotment of shares is expected to be finalised on December 16. The listing on BSE and NSE is likely to be on December 18. The IPO price band ranges between Rs 522 to Rs 549 per equity share. Kotak Mahindra Capital Company, Jefferies India, Morgan Stanley India Company and IIFL Securities are the book-running lead managers of the IPO, while Kfin Technologies is the registrar for the issue.
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