Sai Parenteral Limited's initial public offering is underway. The IPO is in its second day of bidding. It experienced a slow start on its first day. The company aims to raise Rs 409 crore through the issue. The subscription window closes on Friday, March 27. Investors are advised to consider the long-term prospects.

Sai Parenteral IPO Day 2: GMP trends, subscribed only 4% so far. Should you subscribe?

The initial public offering (IPO) of Sai Parenteral Limited has entered its second day of bidding. The issue currently shows no grey market premium (GMP), indicating expectations of a flat listing. However, GMP is only an indicative measure and may change as the IPO progresses.

The IPO got off to a slow start on its first day, registering only a 4% subscription. Bids were received for 3.35 lakh shares out of the 75.22 lakh shares on offer. The retail segment showed minimal interest, with just 3% of its allotted quota subscribed. Sai Parenteral Limited has priced its IPO in the band of Rs 372–Rs 392 per share.

The company aims to raise Rs 409 crore through the IPO, which includes a fresh issue of Rs 285 crore and an offer for sale (OFS) amounting to Rs 123.79 crore. The subscription window will close on Friday, March 27.

IPO Subscription Details (Day 1):

On Day 1, Sai Parenteral’s IPO saw an overall subscription of 4% out of the 75.22 lakh shares on offer.

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Retail Individual Investors (RIIs) subscribed 3% of their allotted 37.86 lakh shares, while Non-Institutional Investors (NIIs) subscribed 15% of their 16.22 lakh share quota.

Meanwhile, Qualified Institutional Buyers (QIBs) did not place any bids for the 21.12 lakh shares reserved for them.

About Sai Parenteral’s IPO

Sai Parenteral Limited has set its IPO price band at Rs 372–392 per share. Retail investors can apply for a minimum of one lot, comprising 38 equity shares worth Rs 14,896.

The IPO consists of a fresh issue of Rs 285 crore and an Offer for Sale (OFS) of Rs 123.79 crore, which includes 31,28,485 shares allocated to anchor investors. On Monday, the company raised Rs 122.63 crore through five anchor investors.

The issue allocation reserves 50% for Qualified Institutional Buyers (QIBs), up to 35% for retail investors, and 15% for Non-Institutional Investors (NIIs).

Grey Market Premium (GMP)

Sai Parenteral’s IPO is currently showing no grey market premium (GMP), suggesting expectations of a flat listing. GMP is indicative and may fluctuate as the issue progresses.

Use of IPO Proceeds

The gross proceeds from the issue will be to the tune of Rs 285 crore. The company will utilise Rs 110.8 crore towards capacity expansion and upgradation of manufacturing facilities, Rs 18 crore for establishment of a new R&D Centre, Rs 14 crore towards repayment of borrowings, and Rs 33 crore for its working capital requirements.

About Sai Parenteral Limited

Sai Parenteral (SPL) is a diversified pharmaceutical formulations company involved in branded generic formulations and Contract Development and Manufacturing Organisation (CDMO) products and services for domestic and international markets. Its product portfolio spans high-value and high-volume therapeutic areas, including cardiovascular, neuropsychiatry, and anti-diabetic treatments, across dosage forms like injectables, tablets, capsules, liquid orals, and ointments.

Financials

In the first half of FY26 (H1FY26), Sai Parenteral Limited reported revenue from operations of Rs 303 crore, with a profit after tax (PAT) of Rs 2 crore. For the full financial year FY25, the company’s revenue stood at Rs 495 crore, while PAT reached Rs 20 crore. In FY24, Sai Parenteral recorded revenue of Rs 154 crore and a PAT of Rs 8 crore. Going further back, in FY23, the company’s revenue was Rs 97 crore, with a PAT of Rs 4 crore, reflecting steady growth in both sales and profitability over the years.

IPO Lead Managers

The Book Running Lead Manager (BRLM) is Arihant Capital Markets Ltd, and the registrar to the issue is Bigshare Services Pvt Ltd.

Should you bid?

SBI Securities recommends that investors 'Subscribe' to the issue for the long term, valuing it at FY25 (proforma) P/E and EV/EBITDA multiples of 88.2X/46.3X, respectively, based on post-issue capital, which appears to be at a premium to its peers.

"SPL operates in the Branded Generic Formulations and CDMO businesses, with the product portfolio covering both high-value and high-volume categories across various therapeutic areas. SPL’s offerings span across dosage forms such as injectables, tablets, capsules, liquid orals and ointments. Of these, the injectables dosage is a high-margin segment for the company, and it plans to increase the share of injectables in the total revenue mix in the coming years. We believe Noumed’s 451 dossiers offer huge growth opportunity for SPL," this brokerage said.

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)

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