Supriya Lifescience IPO: Opens on December 16; find key details that investors must know before investing

Supriya Lifescience IPO: Supriya Lifescience Limited, a manufacturer and supplier of Active Pharmaceutical Ingredients (API) that go into medicines, will open its initial public offering (IPO) for subscription tomorrow, Thursday, December 16, 2021. The three-day issue will close on Monday, December 20, 2021.

The offer price has been fixed at Rs 265-274 per equity share of Rs 2 each. The company has plans to raise up to Rs 700 crore through this public offer. The issue comprises a fresh issue of up to Rs 200 crore and an offer for sale (OFS) of upto Rs 500 crore by promoter Satish Waman Wagh.

Investors can bid for a minimum of 54 equity shares and in multiples of 54 shares thereof. Retail investors can invest a minimum of Rs 14,796 for one lot, and their maximum investment is Rs 1,92,348 for 13 lots.

Of the total offer size, 75 per cent is reserved for qualified institutional buyers, 10 per cent for retail investors, and the remaining 15 per cent for non-institutional investors. The net proceeds from the fresh issue will be used to meet capital expenditure requirements to the tune of Rs 92.3 crore, and repay debts of about Rs 60 crore, besides other general corporate purposes.

ICICI Securities Limited and Axis Capital Limited have been appointed as the Book Running Lead Manager of the issue while Link Intime India Private Limited is the registrar to the issue. Shares will be listed at both BSE and NSE.

The promoter and promoter group currently holds 99.98 per cent equity in the company which will come down to 67.59 per cent after the IPO.

About Supriya Lifescience

Supriya Lifescience Limited is one of the key Indian manufacturers and suppliers of active pharmaceutical ingredients ("APIs"), with a focus on research and development. As of October 31, 2021, it had niche product offerings of 38 APIs focused on diverse therapeutic segments such as antihistamine, analgesic, anaesthetic, vitamin, anti-asthmatic and anti-allergic. The company has consistently been the largest exporter of Chlorpheniramine Maleate and Ketamine Hydrochloride from India, contributing to 45-50 per cent and 60-65 per cent, respectively, of the API exports from India, between Fiscal 2017 and 2021. It is also among the largest exporters of Salbutamol Sulphate in India contributing to 31 per cent of the API exports from India in FY 2021 in volume terms (Source: CRISIL Report).

Supriya Life's pharmaceutical business is organized into domestic and export sales, according to the geographies in which it operates. From April 1, 2020, until October 31 2021, its products were exported to 86 countries to 1,296 customers including 346 distributors. It has grown its API business in several countries across

(i) Europe: It contributed to 17.40 per cent and 18.53 per cent of revenue from operation for the year ended March 31, 2021, and for the six-month period ended September 30, 2021, respectively.

(ii) Latin America: It contributed to 19.15 per cent and 12.01 per cent of revenue from operation for the year ended March 31, 2021, and for the six-month period ended September 30, 2021, respectively.

(iii) Asia (excluding India): It contributed to 29.27 per cent and 36.76 per cent of revenue from operation for the year ended March 31, 2021, and for the six-month period ended September 30, 2021, respectively.

(iv) North America: It contributed to 4.76 per cent and 2.36 per cent of revenue from operation for the year ended March 31, 2021, and for the six-month period ended September 30, 2021, respectively.

(v) India, which contributed to 22.53 per cent and 26.43 per cent of revenue from operation for the year ended March 31, 2021, and for the six-month period ended September 30, 2021, respectively.

The company's business operations are supported by a modern manufacturing facility located in Parshuram Lote, Maharashtra, spread across 23,806 sq meters.

Company Strengths

• As of May 2021, 11 of the existing products were backwards integrated, which contributed 63.25 per cent of the total revenue for nine months period ended December 2020.
• Geographically diversified revenues with a global presence across 78 countries

Potential Risks

• The business is subject to extensive regulation – inability to comply or obtain licenses, permits and
• Manufacturing or quality control problems in such an industry may be detrimental.

Financials

The company reported a net profit of Rs 123.38 crore in the financial year 2020-21, compared to a profit of Rs 73.37 crore in the previous year. The revenue of the company jumped to Rs 396.22 crore in FY21 from Rs 327.71 crore in FY20.

Its total revenue represented a growth of 12.89 per cent and 22.78 per cent, respectively, from Fiscals, 2019 to Fiscal 2020 and from Fiscal 2020 to Fiscal 2021, respectively. Its EBITDA represented a growth of 50.43 per cent and 62.77 per cent, respectively, from Fiscals, 2019 to Fiscal 2020 and from Fiscal 2020 to Fiscal 2021, respectively. Supriya Lifescience's profit after tax represented a growth of 86.19 per cent and 68.70 per cent respectively, from Fiscals, 2019 to Fiscal 2020 and from Fiscal 2020 to Fiscal 2021, respectively.