Analysts suggest subscribing to this pharma company IPO on discounted valuation and strong product portfolio than peers
- Today is the first day to subscribe to the Supriya Lifescience IPO, which will close on December 20.
- The pharmaceutical company is intending to raise ₹700 crore through the IPO, which consists of a fresh issue of ₹200 crore and offer for sale of ₹500 crore.
- Shares of the company are demanding a premium of ₹250 per share in the grey market .
- Analysts recommend subscribing to the issue on some positive factors — diversified product portfolio, strong foothold in international markets, valuation at a discount compared to peers.
AdvertisementAmid myriad initial public offerings (IPO) going on, here is another one worth giving attention to, as analysts recommend subscribing to this one on its good fundamentals.
Today is the first day to subscribe to the initial public offering (IPO) of Mumbai-based active pharmaceutical ingredients (APIs) manufacturer, Supriya Lifescience.
The company produces 38 active pharmaceutical ingredients (APIs) focused on diverse therapeutic segments such as antihistamine, analgesic, anaesthetic, vitamin, anti-asthmatic and anti-allergic.
The company’s manufacturing facility is in Parshuram Lote, about 250 kilometres away from Mumbai, Maharashtra.
Supriya Lifescience is looking to raise ₹700 crore through the IPO, which consists of a fresh issue of ₹200 crore and an offer for sale of ₹500 crore.
Most analysts are positive and suggest subscribing to the issue because of its diversified product range, strong foothold in international markets and valuation at discount compared to peers. Adding to it, shares of the company are demanding a premium of ₹250 per share in the grey market .
|Investmentz||Subscribe for long term|
|Religare Broking||Positive view on a long term|
Supriya Lifescience’s products have been exported to 86 countries and 1,296 customers in FY21. The company has API business in Europe, Latin America, Asia, and North America. Its products are registered with various international regulatory authorities including the US, Europe and China.
“Supriya Lifescience has de-risked its business model with wide geographical presence, diversified product portfolio, catering to diverse therapeutic areas. Also the company has demonstrated a healthy profitable business growth with stable operating cash flows. Since inception, it has reported a positive operating cash flow,” said analysts at Choice Broking while assigning a “SUBSCRIBE” rating for the issue given the valuation is at discount to the peer average.
Analysts from stock broking firm Investmentz say that with the company’s superior product mix, established brand name, strong relationships with leading global companies, and adding capacities, “we believe the company is well placed to capitalise on domestic and global opportunities”.
Considering the company’s niche product portfolio and strong geographical presence, its valuation seems attractive to analysts.
|Peer company||Revenue for FY21||Stock price||% returns in 2021|
|Solara Active Pharma Sciences||₹1,645 crore||₹1,088||-7.9%|
|Neuland Laboratories||₹953 crore||₹1,591||45%|
|Aarti Drugs||₹2,159 crore||₹984||-24%|
|Divi’s Laboratories||₹7,032 crore||₹4,586||19%|
|Supriya Lifescience||₹396 crore||₹265 - ₹274||-|
Advertisement“Supriya Lifescience focuses on research and development and having a diversified niche product portfolio of API’s. Companies 77.5% of revenue comes from the Export market, companies’ key markets are USA, Europe, China and India. We believe that the company's new manufacturing unit and product launch will be growth drivers for the company in future,” said a report by Angel One.
The issue is attractively priced at the upper end of the price band, which is significantly discounted to its listed peers with similar return and margin profile explained a report by BP Equities.
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