Sagility India IPO: Should You Subscribe to This US Healthcare Sector Play?

The Sagility India Limited IPO opened on Tuesday. It is the company’s debut in India’s public markets.

The IPO price is between Rs 28 and Rs 30 per share. It will be open for bidding until November 7, 2024.

The company plans to raise Rs 2,106.60 crore. This IPO is an offer for sale (OFS).

That means the proceeds will go to existing shareholders, not the company.

GMP and Subscription Status

Before the launch, the IPO was trading at a premium of Rs 3 in the grey market.

However, the grey market premium has now dropped to Rs 0.

On the first day of bidding, the IPO was 5% subscribed. Retail investors have shown more interest.

They have subscribed to 24% of their quota. Non-institutional investors (NIIs) have shown less interest.

IPO Details

The IPO price is set at Rs 28-30 per share. The minimum bid is 500 shares per lot.

The company aims to raise Rs 2,106.60 crore at the upper price band.

The shares will list on the BSE and NSE on November 12, 2024.

Anchor investors, such as HDFC Mutual Fund and the Government Pension Fund Global, have already invested Rs 945 crore.

Company Overview and Financials

Sagility India offers services to the US healthcare industry.

The US healthcare market is growing. Sagility is positioned to benefit from this growth.

The company’s revenue rose by 9.6% to Rs 1,223 crore in the latest quarter. For FY24, the company’s revenue reached Rs 4,753 crore, up 12.69%.

The company’s EBITDA margin for FY24 is 23.5%. However, Sagility’s reliance on the US market exposes it to risks like regulatory changes and currency fluctuations.

Brokerage Recommendations

Brokerages have recommended subscribing to the IPO.

StoxBox highlights Sagility’s strong financials and connections in the US healthcare sector.

Master Capital points to growing US healthcare spending and Sagility’s role in the sector. Sagility has strong client retention and growth potential.

Should You Subscribe?

Sagility India’s IPO offers an opportunity to invest in the US healthcare market.

The grey market premium is modest. Early subscription data shows some interest.

Strong institutional backing suggests growth potential.

The IPO is good for long-term investors looking to diversify their portfolios.

Retail investors should assess their risk tolerance. Since this is an offer for sale (OFS), the company won’t use the proceeds to fund its growth.

Conclusion

The Sagility India IPO is an opportunity to invest in the US healthcare sector.

The company has strong financials and an established client base. However, investors should consider the risks before subscribing.