Supriya Lifescience IPO subscribed 71.51 times on final day, QIB portion booked 31.83 times

Supriya Lifescience IPO

The public issue of active pharmaceutical ingredients supplier Supriya Lifescience witnessed strong demand from investors as the offer was subscribed 71.51 times.

It received bids for 103.89 crore equity shares against the IPO size of 1.45 crore equity shares on December 20, the final day of bidding.

Incorporated in March 2008, Supriya Life has niche product offerings of 38 APIs focused on diverse therapeutic segments such as antihistamine, analgesic, anaesthetic, vitamin, anti-asthmatic and anti-allergic as of October. It is the largest exporter of Chlorpheniramine Maleate and Ketamine Hydrochloride contributing to 45-50 percent and 60-65 percent, respectively, of the API exports from India, between FY17 and FY21.

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Retail investors continued to provide strong support to its public issue as their reserved portion was subscribed 56.01 times. Non-institutional investors' portion was booked 161.22 times, while a part set aside for qualified institutional investors saw 31.83 times subscription.

The global pharmaceutical market grew at around 5 percent CAGR during CY14-CY20, and is expected to sustain this growth over the next 5 years to reach $1,585-1,625 billion in CY25 led by technological advances, rise in aging population and sedentary lifestyles.

Supriya Lifescience has a healthy balance sheet position with a debt/equity ratio of 0.2x as of H1FY22. The price band for the offer, which was opened on December 16, is Rs 265-274 per equity share.

Also read - Supriya Lifescience IPO, should you subscribe?

"At the upper price band of Rs 274, Supriya Life is available at price/earnings of 16.7x (FY22E annualized) which appears to be reasonably priced compared to its peers," said Geojit Financial Services.

The brokerage has assigned a “subscribe” rating for the issue on a short to long term basis considering its strong financial performance, including improving margins, export exposure, capacity expansions and increased penetration to regulated markets.

The company is planning to garner Rs 700 crore through its public issue that consists of a fresh issue of Rs 200 crore and an offer for sale of Rs 500 crore. The fresh issue money will get utilised for working capital requirements and repaying of debt.

Also read - Supriya Lifescience IPO: 10 key things to know before subscribing to the public issue