Sai Parenteral’s IPO Day 3: GMP, Subscription Status, and Final Day Considerations

Sai Parenteral’s IPO Day 3: GMP, Subscription Status, and Final Day Considerations​

Sai Parenteral’s IPO, a diversified pharmaceutical formulations company, is set to close for subscription today, March 26. The initial public offering (IPO) which opened on March 24, has received a lukewarm response, with the issue subscribed only 0.42 times by the end of Day 2. The ₹409 crore IPO includes a fresh issue and an offer for sale. Analysts are presenting mixed views on the company’s long-term potential relative to current valuations.

IPO Details and Financials​

The IPO is a combination of a fresh issue of 0.73 crore shares aggregating to ₹285 crore and an offer for sale (OFS) of 0.32 crore shares aggregating to ₹123.79 crore. Ahead of the issue opening, the company had already raised ₹122.6 crore from anchor investors. The funds raised will be used for capacity expansion and upgradation of manufacturing facilities (₹111 crore), the establishment of a new R&D centre (₹18 crore), and debt repayment (₹14.30 crore). The remaining funds will be allocated to general corporate purposes. Investors can apply for the IPO in lots of 38 shares. At the upper price band, a retail investor would require an investment of ₹14,896 for one lot.

GMP and Subscription Status​

The grey market premium (GMP) for Sai Parenteral’s IPO today, March 26, stands at ₹0, suggesting a likely debut at the upper end of the IPO price band of ₹392. By the end of Day 2, the IPO was subscribed 0.42 times, with bids received for 30.82 lakh shares against an offer of 75.22 lakh shares. The subscription for Day 3 will begin at 10 am. The retail portion is subscribed 0.05 times, the non-institutional investor (NII) portion 1.05 times, and the qualified institutional buyer (QIB) portion 0.60 times.

Brokerage Views​

Brokerage firms have offered contrasting perspectives on the IPO. Anand Rathi has assigned a “Subscribe-Long Term” rating, valuing the company at approximately 10.6x to price/sales on FY25 sales (at the upper band), which is considered fairly priced compared to its competitors. Swastika Investmart, however, has raised concerns about the valuation, citing a pre-IPO P/E of 72.19x and a RoCE of 9.28%, which it considers stretched compared to peers like Innova Captab (32.45x) and Gland Pharma (44.71x). Swastika Investmart advises against short-term or listing gains, suggesting better opportunities exist in the pharmaceutical sector at more reasonable valuations.

Sai Parenteral’s About​

Sai Parenteral’s operates as a diversified pharmaceutical formulations player, encompassing research, development, and manufacturing. The company is active in the branded generic formulations segment and provides contract development and manufacturing organisation (CDMO) products and services to both domestic and international markets. Its product portfolio covers therapeutic areas including cardiovascular, neuropsychiatry, anti-diabetic, respiratory health, antibiotics, gastroenterology, vitamins, minerals, and supplements (VMS), analgesics, and dermatology, offering multiple dosage forms like injectables, tablets, capsules, liquid orals, and ointments.