Sagility India IPO: A Comprehensive Overview
The initial public offering (IPO) of Sagility India has officially opened for subscription today, marking a significant milestone for the company and its stakeholders. Investors will have the opportunity to bid until November 7, 2023. This IPO is valued at Rs 2,106 crore and consists entirely of an offer-for-sale of 70.22 crore shares by the promoter, Sagility B.V., with no fresh issue component. It’s important to note that all proceeds, excluding expenses, will be directed to the selling shareholder.
Sagility India IPO Price Band
The company has set a price band for the IPO in the range of Rs 28-30, allowing investors to bid for a minimum of 500 shares in one lot. This pricing strategy aims to attract a diverse range of investors, from retail to institutional.
Sagility India IPO GMP
As the IPO opened, the shares of Sagility India were trading with a Grey Market Premium (GMP) of Rs 0 in the unlisted market. This figure suggests a muted demand for the IPO, which could be indicative of the overall market sentiment surrounding the offering.
Sagility India IPO Review
Analysts have expressed mixed views on the IPO, primarily due to the fact that it is entirely an offer-for-sale (OFS) and the valuations appear to be on the higher side. The prevailing negative market sentiments could potentially impact both the listing performance and subscription numbers.
According to Swastika Investmart, “The company is exclusively focused on the US healthcare market. The outcomes of the US presidential elections could affect its operations. Valuation appears high, with no direct peers for comparison. Investors may consider skipping this IPO.” Conversely, Master Capital Service noted, “The company’s deep, long-term, expanding client relationships across healthcare payers and providers assist in high client stickiness and retention. Investors interested in the company can invest in the IPO for the long term.”
Other Details
Sagility India specializes in providing technology-driven solutions to U.S. healthcare payers and providers, including health insurance companies, hospitals, and medical device companies. The company has reserved a total of 19 lakh shares for its employees at a Rs 2 discount on the final price. The allocation of shares is structured as follows: 75% for qualified institutional buyers, 15% for non-institutional investors, and 10% for retail investors.
Financially, Sagility India reported a 47.5% decline in profit to Rs 22.3 crore for the quarter ending June 2024, primarily due to decreased operating margins and higher taxes. However, revenue rose by 9.6% to Rs 1,223.3 crore, although EBITDA fell by 26.4% to Rs 193.9 crore, with margins shrinking by 777 basis points to 15.85%.
In contrast, for the fiscal year 2024, Sagility’s net profit surged by 59% to Rs 228.3 crore, despite a dip in operating margin. This growth was bolstered by reduced finance costs and increased other income. Revenue grew by 12.7% to Rs 4,753.6 crore, while EBITDA rose by 5.9% to Rs 1,088 crore, although margins declined by 150 basis points to 22.9%.
The lead managers for this IPO include ICICI Securities, IIFL Securities, Jefferies India, and JP Morgan India, all of whom are tasked with ensuring a smooth and successful offering.
Conclusion
As Sagility India embarks on this IPO journey, investors are encouraged to conduct thorough research and consider both the potential risks and rewards associated with the offering. With mixed analyst sentiments and a focus on the U.S. healthcare market, the IPO presents a unique opportunity that could appeal to long-term investors. However, the current market dynamics and the company’s financial performance should be carefully evaluated before making investment decisions.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own and do not represent the views of The Economic Times.)