IPO Note - Supriya Lifescience Ltd By Religare Broking Ltd
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Supriya Lifescience Ltd
About the Company
Supriya Lifescience Ltd. (Supriya) is one of the key Indian manufacturers and suppliers of active pharmaceuticals ingredients (APIs), with a focus on research and development. It has niche product offerings of 38 APIs focused on diverse therapeutic segments such as antihistamine, analgesic, anaesthetic, vitamin, anti-asthmatic and antiallergic. It has consistently been the largest exporter of Chlorpheniramine Maleate and Ketamine Hydrochloride from India between FY17-21. It is also among the largest exporters of Salbutamol Sulphate in India contributing to 31% of the API exports from India in FY21 in volume terms. Its products are exported to 86 countries to 1,296 customers including 346 distributors. Its customers include global pharma companies such as Syntec Do Brasil LTDA, American International Chemical Inc and AT Planejamento E Desenbolvimento De Negocios Ltda. Its products are registered with various international regulatory authorities such as USFDA, EDQM, NMPA (previously known as SFDA), KFDA, PMDA, TGA and Taiwan FDA. Its business operations are supported by a modern manufacturing facility located in Parshuram Lote, Maharashtra, which is approximately 250 km from Mumbai, Maharashtra. The manufacturing facility is spread across 23,806 sq.mts, having a reactor capacity of 547 KL/ day and seven cleanrooms.
Objects of the Issue
* Funding capital expenditure requirements of the company
* Repayment and/ or pre-payment, in full or part, of certain borrowings availed by the company
* General corporate purposes
Valuation
The global pharmaceutical market has grown by around 4.8% CAGR from ~USD 955 billion in CY14 to ~USD 1,270 billion in CY20. It is expected to sustain this growth over the next five years to reach USD 1,585-1,625 billion in CY25. The key growth drivers include new product launches, widespread population aging and sedentary lifestyles leading to increased chronic disease prevalence. Moreover, technological advances, new methods for drug discovery, and an increase in pharmaceutical drug usage would drive growth for the industry
Supriya stands to benefit from the positive industry growth trends given that it has a significant scale with a leadership position across key & niche products. Its backward integration of API ensures a steady supply of intermediates. Moreover, it has geographically diversified revenues with a global presence across 86 countries. Its financial performance has been healthy with revenue and PAT CAGR of 17.7% and 77.2% over FY19-21. Going forward, Supriya intends to enhance its production capacity and capabilities through additional capital expenditure in its existing manufacturing facilities. It also plans to expand its product portfolio with increasing R&D capabilities and continue to grow its sales in existing geographies in Latin America, North America, Europe, Asia and Middle East. On the valuation front, the company is valued at 17x FY22 post issue annualized EPS. From a long term perspective, we have a positive view on the company.
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SEBI Registration number is INZ000174330
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