Sai Parenteral's IPO Sees 2% Subscription on Day 1: Key Details and Investment Considerations

Sai Parenteral's IPO Update

Key Details

• IPO Opens: March 24
• IPO Closes: March 27
• Price Band: ₹372 - ₹392 per share
• Lot Size: 38 shares
• Minimum Investment: ₹14,896

IPO Subscription Status

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As of 12:40 PM on the first day of the bidding process, the IPO has been subscribed 2% overall. The Retail Individual Investors (RIIs) segment was subscribed 2%, while the Non Institutional Investors (NII) category was subscribed 5%. Qualified Institutional Buyers (QIBs) have yet to bid.

Grey Market Premium

Sai Parenteral's shares are trading without any premium or discount to their issue price, indicating a Grey Market Premium (GMP) of ₹0 per share.

IPO Utilization

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The net issue proceeds will be utilized for:

• Capacity expansion and upgradation of manufacturing facilities
• Establishment of a new R&D Centre
• Repayment or prepayment of certain outstanding borrowings
• Working capital requirements
• Investment in wholly owned subsidiary, Sai Parenterals Pte Limited (Singapore)
• Proposed acquisition of Noumed Pharmaceuticals Pty Limited (Australia)
• General corporate purposes

IPO Listing Details

• Allotment Date: Likely March 30
• Listing Date: Tentative April 2

Brokerage Recommendations

SBI Securities recommends investors to subscribe to the IPO at the cut-off price for a long-term investment horizon. Swastika Investmart advises investors to avoid the IPO for short-term or listing gains due to unfavorable risk-reward ratio and recommends exploring better opportunities in the pharma sector at more reasonable valuations.

Valuation

At the upper-end of the price band, Sai Parenteral's IPO is valued at FY25 (proforma) P/E and EV/EBITDA multiples of 88.2x/46.3x respectively, which appears to be at a premium to its peers.