Sai Life Science grew fast, but pricing looks expensive
Sai Life Science (SLSL), a contract research, development and manufacturing organisation (CRDMO), is rolling out an IPO of ₹3,043 crore comprising a fresh issue of ₹950 crore and an offer for sale of ₹2,093 crore.
The issue gives a partial exit to private equity investors TPG Asia and HBM. The promoter share will be diluted from 41.8% to 35.2%. The issue proceeds are going to be used for repayment of borrowings.
Business: Incorporated in 1999, SLSL provides end-to-end services from discovery, development and manufacturing for small molecule new chemical entities to global pharma innovators and biotech firms. Eighteen of the top 25 global pharma companies are its clients. It has an average of over 10 years of relationship with its top 10 customers.
Contract research services contribute 34% to the total revenues, while contract development and manufacturing contribute 66%. SLS has a unique global delivery model with research laboratories in Boston, US, and Manchester, UK, enjoying proximity to global innovation hubs and complemented by large-scale research laboratories and manufacturing facilities in cost-competitive locations in India. The company has provided molecule discovery services to more than 160 customers in the past three years.
At the end of September 2024, the company's CDMO portfolio included more than 170 innovator pharma products including 38 products that were supplied for manufacturing of 28 commercial drugs.
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