Sai Life Sciences Limited– about the company
Sai Life Sciences is an innovator-focused contract research, development, and manufacturing organization (CRDMO) provides end-to-end services across the drug discovery, development, and manufacturing value chain for small molecule new chemical entities. They are the fastest-growing Indian CRDMO in terms of revenue. Their platform offers multiple entry points for customers in the intermediate stages of their new drug discovery to commercialization journey.
In FY24, they served more than 60 customers on an ongoing basis for their integrated drug discovery programs. Their CDMO product portfolio included over 150 innovator pharmaceutical products, including 38 products supplied for manufacturing of 28 commercial drugs. Their CRO services include integrated discovery capabilities across biology, chemistry, and drug metabolism and pharmacokinetics. Their CDMO services support the development and scaling up production of active pharmaceutical ingredients and intermediates for clinical and commercial phase supplies.
As of March 31, 2024, no single customer accounted for more than 9.55% of its revenue. The company has a strategic presence in innovation clusters in Boston, US and Manchester, UK, providing access to research trends and a talented global workforce.
Sai Life Sciences Limited IPO objectives
Sai Life Sciences IPO offer comprises of fresh issue and offer for sale.
- The offer for sale (OFS) consists of up to 38,116,934 equity shares and nothing from those proceeds will be allotted to company.
- The fresh issue consists of Rs, 9,500 million. Out of Rs. 950 crores, Rs. 720 crores will be utilized for payment of certain outstanding borrowings and rest of the issue amount will be used for general corporate purposes.
Sai Life Sciences Limited IPO details:
| IPO Open Date | December 11, 2024 |
| IPO Close Date | December 13, 2024 |
| Basis of Allotment | December 16, 2024 |
| Listing Date | December 18, 2024 |
| Face Value | ₹1 per share |
| Price | ₹522 to ₹549 per share |
| Lot Size | 27 shares |
| Total Issue Size | 55,421,123 shares |
| (aggregating up to ₹3042.62 Cr) | |
| Fresh Issue | 17,304,189 shares |
| (aggregating up to ₹950 Cr) | |
| Offer For Sale | 38,116,934 shares |
| (aggregating up to ₹2092.62 Cr) | |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE & NSE |
| QIB Shares Offered | Not more than 50% of the Net Issue |
| Retail Shares Offered | Not less than 35% of the Net Issue |
| NII (HNI) Shares Offered | Not less than 15% of the Net Issue |
Sai Life Sciences Limited IPO issue price & size
The issue price of Sai Life Sciences has been released for Rs. 522 to Rs. 549. The company has an OFS of 38,116,934 equity shares and fresh issue of Rs. 950 crores.
Sai Life Sciences Limited IPO launch date
The IPO of this company is launching on December 11, 2024, hence the opening date for bidding is December 11, 2024 and the IPO is closing on December 13, 2024. Investors can bid in this IPO between these days during the primary market hours.
Sai Life Sciences Limited financial statement:
| FY24 | FY23 | FY22 | |
| Income | ₹ in millions | ||
| Revenue from operations | 14651.78 | 12171.39 | 8695.93 |
| Other income | 290.91 | 279.66 | 281.48 |
| Total income | 14942.69 | 12451.05 | 8977.41 |
| Expenses | |||
| Cost of materials, chemicals
and reagents consumed |
4232.97 | 4171.75 | 2695.91 |
| Change in inventories of
work-in- progress |
224.33 | -45.88 | -28.3 |
| Employee benefits expense | 4949.05 | 4172.86 | 3089.7 |
| Finance costs | 859.1 | 770.57 | 495.71 |
| Depreciation and
amortisation expense |
1194.36 | 994.32 | 901.61 |
| Other expenses | 2390.54 | 2123.35 | 1725.833 |
| Total expenses | 13850.35 | 12286.97 | 8880.46 |
| Profit after tax | 828.09 | 99.89 | 62.26 |
| Key Performance Indicators | Units | FY24 | FY23 | FY22 |
| Total revenue from operations | (in ₹ million) | 14651.78 | 12171.39 | 8695.96 |
| Revenue from contract research | (in ₹ million) | 4971.7 | 4671.19 | 2737.28 |
| Revenue contribution from contract research | (%) | 33.85 | 39.03 | 31.49 |
| Revenue from contract
development and manufacturing |
(in ₹ million) | 9715.53 | 7298.3 | 5953.96 |
| Revenue contribution from contract
development and manufacturing |
(%) | 66.15 | 60.97 | 68.51 |
| Year on year revenue growth | (%) | 20.38 | 39.97 | - |
| EBITDA | - | 3001.15 | 1822.33 | 1310.63 |
| Year on year EBITDA growth | (%) | 64.69 | 39.04 | - |
| EBITDA margin | (%) | 20.48 | 14.97 | 15.07 |
| Capital expenditure | (in ₹ million) | 1892.15 | 951.95 | 1935.24 |
| Profit before tax | (in ₹ million) | 1092.34 | 164.08 | 96.95 |
| Profit after tax | (in ₹ million) | 828.09 | 99.89 | 62.26 |
| Profit after tax margin | (%) | 5.65 | 0.82 | 0.72 |
| Return on capital employed (ROCE) | (%) | 10.26 | 5.13 | 3.21 |
| Return on equity (ROE) | (%) | 8.49 | 1.12 | 0.71 |
| Net debt / equity | - | 0.75 | 0.8 | 0.84 |
| Net debt/ EBITDA | - | 2.43 | 3.9 | 5.61 |
| Gross fixed asset turnover | (%) | 87.25 | 85.81 | 69.02 |
| Net working capital days | - | 122 | 140 | 204 |
| Total borrowings | (in ₹ million) | 7101.63 | 6992.29 | 7513.18 |
| Total number of scientific staff | - | 2125 | 2012 | 1779 |
| Number of commercial molecules
in the CMC portfolio |
- | 28 | 22 | 22 |
| Number of Phase III molecules
in the CMC portfolio |
- | 10 | 6 | 4 |
| Total number of employees | - | 2845 | 2677 | 2400 |
| Inventory Days | No. Of Days | 93 | 115 | 139 |
Promoters & shareholders of Sai Life Sciences
As of date of filing the prospectus, the company has eight promoters.
| Category of Shareholders | Number of Equity Shares held | % of Pre-Offer Equity Share capital | No. of Eq. shares offered | Designation |
| Promoter | ||||
| Marigold Partners | 21606800 | 11.25 | ||
| Sunflower Partners | 15184270 | 7.91 | ||
| Sai Quest Syn Private Limited | 10762480 | 5.61 | 6454780 | |
| Tulip Partners | 9043920 | 4.71 | ||
| Lily Partners | 6723690 | 3.5 | ||
| Krishnam Raju Kanumuri | 2950000 | 1.54 | Promtoer, MD and CEO | |
| Kanumuri Ranga Raju | 165000 | 0.09 | Promoters, Chairman & Whole-time Director | |
| Kanumuri Mytreyi | 60000 | 0.03 | Promoters | |
| Total | 66496160 | 34.64 | ||
| Promoter Group | ||||
| Gokaraju Subba Raju | 93,87,300 | 4.89 | - | |
| Gokaraju Lakshmi Tanuja | 13,01,210 | 0.68 | - | |
| Kanumuri Sudha | 5,00,000 | 0.26 | - | |
| Continental Wines Private Limited | 5,00,000 | 0.01 | - | |
| Investor Selling Shareholders | ||||
| TPG Asia VII SF Pte | 7,62,01,800 | 39.69 | 45721080 | |
| HBM Private Equity India | 1,05,57,320 | 5.5 | 6862260 | |
| Other Selling Shareholders | ||||
| Anita Rudraraju Nandyala | 41,84,420 | 2.18 | 500000 | |
| Raju Penmasta | 28,66,000 | 1.49 | 500000 | |
| Bharathi Srivari | 9,00,000 | 0.47 | 650000 | |
| Dr. Dirk Walter Sartor | 2,50,000 | 0.13 | 2,50,000 | |
| Jagdish Viswanath Dore | 2,50,000 | 0.13 | 2,50,000 | |
| Rajagopal Srirama Tatta | 2,50,000 | 0.13 | 2,50,000 | |
| K Pandu Ranga Raju | 1,18,330 | 0.06 | 80,000 | |
| Alluri Srinivasa Raju | 50,000 | 0.03 | - | |
| Bhupathi Raju Atchuta Ramakrishna Raju | 30,000 | 0.02 | - | |
| Srinivasa Rao Karra | 20,000 | 0.01 | - | |
| Venkata Narasimha Sastry Renduchintala | 5,000 | Negligible | - | |
Should You Subscribe to Sai Life Sciences IPO or Not
While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.
Strengths of the Company:
One-stop platform for discovery, development and manufacturing
The company is a leading integrated CRDMO in India, offering a comprehensive platform for discovery, development, and manufacturing. Because of company’s’ participation in early stage process like drug discovery, the company can assist customers in every stage of drug development, offering speed, cost, and innovation.
The company has demonstrated its ability to scale up programs through technology transfers from other CRDMOs. As of March 31, 2024, the company's CDMO portfolio consisted of 49 late phase or commercial products, with 75.19% of its total revenue from chemistry services coming from customers who also engaged its biology and/or DMPK services.
CDMO platform with a diverse mix of molecules
As of March 31, 2024, their development and manufacturing services cover the full value chain for intermediates and APIs. Their portfolio includes 38 products used in 28 commercial drugs, seven blockbusters, and 11 products used in ten Phase III clinical trials. The company also has over 100 products in various stages of development. Strong technical and R&D infrastructure, skilled scientific talent, and quality manufacturing with a clean track record of regulatory compliance are key success factors for a CDMO.
Modern R&D infrastructure
The company is the only CRDMO among Indian peers that can conduct development activities in close proximity to customers and transfer technology for manufacturing back to India. The company's facilities in India offer a cost-competitive advantage for conducting drug discovery research activities at scale, development, and large-scale commercial production of products. The company has four main facilities, each serving a unique purpose in drug discovery, development, and manufacturing. The Bidar facility, India, has over 425 KL of reactor capacity and has received approvals from the USFDA, PMDA Japan, and COFEPRIS Mexico. The Hyderabad facility houses a fully integrated R&D campus for discovery, CMC process development, and clinical phase manufacturing. The Greater Boston facility has developed and transferred over seven biology assays, enabling onboarding of larger discovery programs in India. The Manchester facility has expanded a laboratory set-up, titled 'Centre of Excellence', providing development, scale-up, and technology transfer to India-based sites.
Backed by strong promoter & investors
The company is led experienced management with 25 years of experience in the pharmaceutical industry. The team is led by promoters Kanumuri Ranga Raju and Krishnam Raju Kanumuri, who have driven the company's growth through expansion, acquisitions, and mergers. The company is supported by financial investors like TPG Asia VII SF Pte Ltd and HBM Private Equity India.
Risk Factors of the Company:
Dependency on secure business
The company's Discovery (CRO) and CMC (CDMO) services rely heavily on biotechnology customers. Company CMC service is reliant on budget allocated by innovator pharmaceutical companies for the development of new drugs. In scenario of budget lowering by these customers may result in lower revenues generation by the company. this may impact their financial and operations. Under touch economic condition, there is a higher risk of decreased funding.
| FY24 | FY23 | FY22 | |
| ₹ in millions | |||
| Contract research | 4971.7 | 4671.19 | 2737.28 |
| Contract development and manufacturing | 9715.53 | 7298.3 | 5953.96 |
| Revenue from contract research, development
and manufacturing activities |
14687.23 | 11969.49 | 8691.24 |
Quality standards checks
The company is subject to stringent quality standards and specifications in this regard. While they have not experienced material manufacturing or quality control issues in the past three financial years, any such issues may render us in breach of various quality standards and specifications stipulated in our supply agreements with customers.
Dependence on customer
Any significant cutback in outsourcing services due to industry consolidation, financial deterioration, research and development budget cuts, or pending regulatory approvals could materially and adversely affect the business, financial condition, and results of operations. Additionally, any deterioration in key customers' ability to settle trade receivables or a reduction in demand due to destocking could result in delays in contract completion.
| FY24 | FY23 | FY22 | |
| % of revenue from operations | |||
| Our largest customer | 9.55 | 10.35 | 10.83 |
| Our top five customers | 31.17 | 28.41 | 27.87 |
| Our top 10 customers | 46.26 | 40.19 | 43.53 |
Risk of losing revenue from products supplied
The company's manufacturing revenue is primarily derived from products supplied to innovator pharmaceutical companies. This is a significant portion of their revenue for the FY22 to FY24. As patents expire, the company faces the risk of customers discontinuing due to increased generic competition. This could lead to revenue loss, negatively impacting the company's business, financials, and overall operations.
| FY24 | FY23 | FY22 | |
| % of revenue from contract development and manufacturing | |||
| Manufacturing revenue derived
from supplies to innovator pharmaceutical companies |
96.37 | 96.92 | 89.92 |
Impacts of PLI schemes
There is a big role of production linked incentive schemes floated during 2023 for giving boost to exports. The company operates as an export-oriented unit (EOU), allowing it to import goods without paying import duties. Any changes made in existing policies of implementation of new rules unfavorable to company might impact it business and profitability directly.
Sai Life Sciences Grey Market premium
The Grey Market Premium or GMP is the premium over the issue price of an IPO that is determined in the grey market as per demand and supply of shares. The grey market is an unofficial ecosystem where shares of unlisted companies start much before the listing and allotment of the shares. However, you can use the GMP as a speculative listing price.
Also Read: What is Grey Market Premium in IPO: How is GMP Calculated & Reliable
The GMP of Sai Life Sciences IPO is hovering around at Rs 42 in the grey market. The GMP does not remain stable, it can increase or decrease depending on the demand for shares and the sentiments of the investors in the secondary market.
Hence, you should not consider the GMP only as the reliable factor to determine the share price of the unlisted company, as there are various factors that affect the stock market in India and the share price of individual listed companies that are considered.
How to Apply for Sai Life Sciences IPO?
If you have a share trading and demat account at Moneysukh, you can easily apply for the Sai Life Sciences IPO. Just follow the steps given below.
Step 1: Once Sai Life Sciences IPO opens you can apply online.
Step 2: Browse at trade.moneysukh.com and log in with your Moneysukh User ID & password.
Step 3: Now you have to visit the IPO section and select Sai Life Sciences IPO.
Step 4: Here just fill in the required such as bidding price, quantity or lot and so on.
Step 5: Now you have to make the payment and your IPO application is successful.
How to Check Sai Life Sciences IPO Allotment Status?
Just like applying, checking the Sai Life Sciences IPO Allotment Status is also very easy and hassle-free through Moneysukh online platform. You have to just wait till the IPO is closed and the allotment is finalized. If you have been allotted any share it will be transferred into your demat account that you can sell after listing of the shares on the NSE or BSE stock exchanges.
Also Read: How to Increase the Chances of IPO Allotment
However, if IPO is oversubscribed and unfortunately if you have not been allotted any share, your IPO application money will be returned to your bank account or linked account where you have allocated the fund while applying for the Sai Life Sciences IPO.
Also Read: How to check IPO allotment status on NSE, BSE through Moneysukh
