Sagility IPO: A Comprehensive Overview
The initial public offering (IPO) of Sagility India Ltd is set to conclude its subscription today, November 7, 2023. This IPO has garnered significant interest from retail investors and employees, while the response from non-institutional investors and Qualified Institutional Buyers (QIBs) has been comparatively subdued. Market analysts predict that the final day of bidding will see a surge in subscriptions, potentially leading to full subscription numbers.
Strong Retail Interest
Market experts have expressed a favorable outlook on the Sagility IPO, primarily due to its attractive pricing. Arun Kejriwal, founder of Kejriwal Research and Investment Services, highlighted the unique pricing advantage of the IPO, which is set between ₹28 and ₹30 per share. "We haven’t encountered anything like this for some time. Nearly every new issue we come across is priced at least in the three-digit range. As a result, this price point is quite appealing," Kejriwal noted. The retail segment has already been fully subscribed, indicating strong demand.
Anchor Investor Support
Sagility India Ltd has successfully secured over ₹945 crore from anchor investors ahead of the public offering, which commenced on November 5. The price band of ₹28-30 per share has positioned the company favorably in the market, attracting significant attention from retail investors.
Subscription Status
As of the last day of subscription, the Sagility IPO has been subscribed 3.20 times, according to data from the Bombay Stock Exchange (BSE). The offering received bids for approximately 1.24 billion shares against the 387 million shares available. The breakdown of subscriptions reveals that the retail investor segment was subscribed 4.16 times, while non-institutional investors subscribed 1.93 times. The QIB portion was booked 3.52 times, and the employee segment saw a subscription rate of 3.75 times.
On the second day of bidding, the IPO recorded a 52% subscription rate, with retail individual investors achieving a subscription rate of 2.24 times. The non-institutional investor segment saw a 24% subscription, while QIBs reported a 7% subscription rate.
Company Profile
Sagility India, formerly known as Berkmeer India Private Limited, specializes in providing healthcare solutions and services to both payers (U.S. health insurers) and providers (hospitals, physicians, and medical technology firms). The company plays a crucial role in supporting the operations of these entities, offering services that encompass centralized claims management and clinical services.
Expert Reviews
Brokerage firms have provided positive reviews of the Sagility IPO. According to Nirmal Bang, the company possesses significant expertise in the specialized payer healthcare sector, distinguishing itself from conventional IT firms. The increasing trend towards outsourcing in the healthcare industry positions Sagility for growth and market share expansion. The shares are currently priced at an adjusted P/E ratio of 24x and an EV/EBITDA of 13x based on FY24 earnings, which appears reasonable given the company’s specialized focus.
Master Capital Services Ltd emphasized the complexities of the U.S. healthcare sector, which requires specialized service providers. Sagility India Limited stands out as a tech-enabled healthcare specialist, offering extensive services that foster strong client relationships and loyalty.
IPO Details
The IPO consists solely of an offer for sale of 70.22 crore shares, valued at ₹2,106.60 crore at the upper end of the price range. The promoter, Sagility BV, is divesting its shareholding through this offering. The proceeds from the public offering will be directed to the selling shareholders.
The book-running lead managers for the Sagility India IPO include ICICI Securities Limited, IIFL Securities Ltd, Jefferies India Private Limited, and J.P. Morgan India Private Limited, with Link Intime India Private Ltd serving as the registrar.
Grey Market Premium
As of today, the grey market premium (GMP) for the Sagility India IPO stands at +0.50, indicating that shares are trading at a premium of ₹0.50 in the grey market. This suggests an estimated listing price of ₹30.5 per share, which is 1.67% higher than the IPO price of ₹30. However, the GMP has shown a downward trend over the past ten sessions, with fluctuations ranging from ₹0 to ₹3.
Conclusion
The Sagility IPO has attracted considerable attention, particularly from retail investors, due to its competitive pricing and the company’s strong positioning in the healthcare sector. As the subscription period comes to a close, market participants are keenly watching the final numbers and the potential for a successful listing. Investors are advised to consider the insights from market experts and conduct thorough research before making any investment decisions.