Supriya Lifescience IPO Review 2021 – Price Band and Other Details!

Supriya Lifescience IPO Review: Supriya Lifescience Ltd. Initial Public offering (IPO) will open for subscription on December 16th, 2021, and close on December 20th, 2021. The company is looking to raise Rs. 700 crores through the IPO. Rs 200 Cr will be a fresh issue and the rest Rs 500 Cr will be Offer for Sale (OFS). In this article, we take a closer look at the Supriya Lifescience Ltd IPO Review and its possible future prospects. Keep Reading to find out!

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Table of Contents

  1. About the Company

  2. About the Industry

  3. Strengths of the Company

  4. Weaknesses of the Company

  5. Key IPO Information

  6. Purpose of the Issue

  7. In closing

About the Company

Supriya Lifescience Ltd. is one of the key Indian manufacturers and suppliers of active pharmaceutical ingredients (“APIs”), with a focus on research and development. Currently, the company offers 39 APIs focused on diverse therapeutic segments. These include antihistamine, analgesic, anaesthetic, vitamin, anti-asthmatic and antiallergic.

It has a modern manufacturing facility located in Parshuram Lote, Maharashtra. It presently operates in five cleanrooms and is setting up two new cleanrooms that are expected to be commercialised in the first quarter of Fiscal 2022.

Total Assets | Supriya Lifescience IPO Review

It is the largest exporter of Chlorpheniramine Maleate and Ketamine Hydrochloride from India, contributing to 45-55% and 65-70%, respectively. It is the largest exporter of Salbutamol Sulphate from India in Fiscal 2020.

In Fiscal 2021, the products of this company were exported to 78 countries and consumed by 1,060 customers including 286 distributors. The company has API business in Europe, Latin America, Asia, and North America.

Profit After Tax | Supriya Lifescience IPO Review

The profit after tax represents a growth of 351.71%, 86.11% and 3.83% respectively.

Key competitors of the company

  1. Divis Laboratory

  2. Wanbury limited

  3. Unichem Laboratories Ltd

  4. Mangalam Drugs and Organics Limited,

  5. IPCA Laboratories Limited

  6. Teva API B.V


Is Valuation of IPOs Justified? What are the Causes for the Valuations? 

About the Industry

India is a preferred destination for the procurement of active pharmaceutical ingredients (APIs), especially in regulated markets. The Indian pharmaceutical industry can be broadly classified into formulations and bulk drugs. A major part is sold in the domestic market and also used for captive consumption with many large formulation players performing backward integration.

The bulk drugs industry in India grew at 8.3% CAGR between fiscal 2015 and 2020. About USD 3.9 billion worth of bulk drugs were exported in fiscal 2020.

Indian domestic formulations market consumption grew at a healthy rate at 8.6% CAGR over the last five years. The domestic Formulations segment is expected to grow at 11% CAGR over the next five years driven by strong demand in the generic segment.

India has the highest number of US FDA-approved facilities outside the US. The country has consistently maintained its leadership in drug master file (DMF) submissions.

Strengths of the Company

  1. The company has a significant scale with a leadership position across key & niche products in the industry.

  2. The company has a Backward integrated business model.

  3. A global player with a presence in more than 78 countries.

  4. The company focuses on advanced manufacturing and research and development capabilities.

  5. Supriya Lifescience has an experienced senior management team and qualified operational personnel.

Weaknesses of the Company

  1. Due to high competition in the industry, the timing to commercialise new products is very important.

  2. The business is subject to extensive regulations of the industry.

  3. Any manufacturing or quality control problems may damage the reputation of the company in the market.

  4. Any change in the demand by the consumers can have a significant impact on the revenue from the sale of certain products.

  5. High dependence on third-party suppliers and transporters. Any interruption can affect the operations of the business.

Key IPO Information

Promotors Holding Pre/Post IPO | Supriya Lifescience IPO Review

Satish Waman Wagh is the promoter of the company. ICICI Securities Limited and Axis Capital Limited are the Book Running Lead Managers of the issues. Link Intime India Private Limited has been appointed as the registrar to the offer. ParticularsDetails IPO Size₹700.00 Cr Fresh Issue₹200.00 Cr Offer for Sale (OFS)₹500.00 Cr Opening dateDecember 16, 2021 Closing dateDecember 20, 2021 Face Value₹ 2 per equity share Price Band₹ 265 to ₹ 274 per equity share Lot Size54 Shares Minimum Lot Size1 Maximum Lot Size13 Listing DateDecember 28, 2021

Purpose of the Issue

The net proceeds of the issue will be used for:

  1. Funding capital expenditure requirements of the company

  2. Repayment and/or pre-payment, in full or part, of certain borrowings availed by the company

  3. General corporate purposes

In closing

In this article, we covered the Supriya Lifescience Limited IPO Review 2021. The Initial Public Offering opens on December 16th and closes on December 20th. For investors, it can be a good opportunity to look into the company and apply for the IPO after analysing the strengths and weaknesses of the company. Let us know what you think about the IPO in the comments below? Happy Investing!

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