Supriya Lifescience IPO Good or Bad? GMP, Allotment, Review, & Details

Mohit

2 years ago

Supriya Lifescience Limited Introduction

Supriya Lifescience Limited Introduction

Supriya Lifescience is one of the key Indian manufacturers and suppliers of active pharmaceutical ingredients (“APIs”), with a focus on research and development. Mumbai-based Supriya Lifescience is also a leading exporter in the API segment. It has a niche product offering of 38 APIs focused on diverse therapeutic segments such as antihistamine, analgesic, anesthetic, vitamin, anti-asthmatic and antiallergic.

The company is coming up with an IPO of 700 cr comprises a fresh issue of equity shares aggregating up to Rs. 200 crores and an offer for sale of equity shares aggregating up to Rs. 500 crores from selling shareholders.

What are the risk factors in Supriya Lifescience IPO?

1. The company derives most of its revenue from a certain number of products, a fall in demand for these products may affect the company.

2. The company is dependent on a certain number of customers, any change in customers may affect the company

3. They are to a large extent dependent on third party suppliers and transporters

4. There are certain outstanding legal proceedings against the company

5. There are contingent liabilities against the company

What are the competitive strengths in Supriya Lifescience IPO?

1. The company is one of the leaders in the API sector with a wide business scale

2. Company is the largest exporter of Chlorpheniramine Maleate and Ketamine Hydrochloride from India

3. The company has a global presence across 86 countries

4. Company has shown good financials over the past 12 years with impressive margins and stable cash flows

5. The company has an Award-winning and experienced senior management team

What are the product offerings of Supriya Lifescience Limited?

The Company deals mainly in the API segment comprises of products like Chlorpheniramine Maleate, Ketamine, Salbutamol Sulphate, Vitamin B2 (Riboflavin, Lactoplavin) and its salts, Other derivatives of Pyridine

How are the financials of Supriya Lifescience Limited?

The company’s revenue are consistently growing Also
Company is showing consistent growth in the profits plus margins

Financial Year Ended	Revenue (₹ Crores)	PAT (₹ Crores)	EPS (₹)
March 2019	285.86	39.42	5.39
March 2020	322.71	73.40	10.03
March 2021	396.22	123.83	16.92
As of September 30, 2021	230.06	65.96	9.01

Promoters of Supriya Lifescience Limited

Satish Waman Wagh is the promoter of the company.

Objects Of Supriya Lifescience IPO net proceeds

Supriya Lifescience IPO Size is Rs 700 Cr. The net proceeds will be used towards:

1) Offer for Sale (OFS) Rs 500 Crores: Under OFS, selling shareholders would sell their shares however, the company would not get any money from this IPO proceeds.

2) Fresh issue of Rs 200 Crores: Fresh issue towards the following purposes:

i) Funding capital expenditure requirements of the company

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

iii) General corporate purposes of the company

Supriya Lifescience IPO open & close date

IPO open date is: 16th Dec 2021, as well as IPO Close date, is: 20th Dec 2021

Supriya Lifescience IPO allotment, refund & listing date

The allotment date is: 23rd Dec 2021

The refund date is: 24th Dec 2021

IPO listing date is: 28th Dec 2021

Supriya Lifescience IPO allotment status

Allotment can be checked through Linkintime.co.in

Supriya Lifescience IPO GMP (Grey Market Price)

IPO GMP is RS 100 (36.50% premium) as of 21st Dec 2021

Supriya Lifescience IPO price band, RHP & details

Listing date	28 Dec 2021
Price range	265 – 274
Minimum order quantity	54
(D)RHP	View
Minimum 1 lot amount (54 shares) for retail investors	₹14,796
Maximum 13 lots amount (702 shares) for retail investors	₹192,348

IPO price band

Supriya Lifescience IPO valuation (Overpriced or underpriced?)

Calculating with its upper price band of Rs 274

Now, the EPS (earning per share) for FY21 is 16.92 so the P.E ratio (price to earnings ratio) comes at 274/16.92=16.19x

If we consider the last 3 years weighted average EPS of Rs 12.7 and the upper price band of Rs 274, P/E works out to be 21.57x.

Also if we consider the EPS of Sep Q 2021 and annualize it = 274/9.01= 30.41x/2 therefore, the P.E comes out at 15.20

Therefore, the company is asking P.E ranging between 12.7X to 21.57X which is underpriced as compared to its Peers and the industry P.E which is 23x

Supriya Lifescience IPO good or bad? (review)

Supriya Lifescience is one of the key Indian manufacturers and suppliers of active pharmaceutical ingredients (“APIs”), with a focus on research and development. Their Foreign establishment is very strong as they supply APIs across 86 countries, moreover, they are also the leading exporters of Chlorpheniramine Maleate and Ketamine Hydrochloride from India. Above all the company is consistently growing even before the Covid period and showing impressive financials and margins. In conclusion, looking at all these factors also its IPO pricing is underpriced and attractive. One can definitely invest in the company for further gains in the future, also it can give bumper listing gains as the GMP is indicating a high premium.

FAQ

1. How much retail quota is there in Supriya Lifescience IPO?

QIB Shares Offered Not less than 75% of the Offer
Retail Shares Offered Not more than 10% of the Offer
NII (HNI) Shares Offered Not more than 15% of the Offer

2. What is the pre and post-promoter holding in Supriya Lifescience IPO?

Pre Issue Share Holding 99.98% Post Issue Share Holding 68.24%

3. How to apply for Supriya Life Science IPO?Steps through Zerodha

Follow below steps to apply this IPO in Zerodha platform:
1) Visit the Zerodha portal and log in to Console.
2) Go to Portfolio and click the IPOs link.
3) Visit the ‘Supriya LifeScience IPO’ row and click the ‘Bid’ button.
4) Enter your UPI ID, Qty, and the Price which you want to bid.
5) Click on the ‘Submit’ IPO application form.
6) Visit the UPI App (net banking or BHIM) to approve the mandate

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