December 15, 2021

Supriya Lifescience: All you need to know

Blog | IPO

From being incorporated in 1987 as a partnership firm which makes chemicals, Supriya Lifescience has evolved into one of the key manufacturers and suppliers of active pharmaceutical ingredients (APIs). Also, over the last three years, the company has posted strong financial performance. Its revenue and profit have risen steadily, aided by growth in domestic and export pharma markets. This API manufacturer is now all set to launch its ₹700 crore IPO and list on the exchanges.

Offer details

Start date: 16 December 2021
End date: 20 December 2021
Price band: ₹265-₹274
Minimum investment: ₹14,796
IPO size: ₹700 crore

All about the IPO

Armed with a degree in chemistry and economics, Satish Wagh set up the company in 1987. After initially dabbling in the chemical space, the company started making APIs in 1993. Since then, Wagh has transformed the company into a big exporter of key APIs, which are used in the pharmaceuticals industry for making drugs.

The company’s niche 38 APIs are used in diverse therapeutic segments such as antihistamine, analgesic, anaesthetic, vitamin, anti-asthmatic and anti-allergic. Supriya Lifescience has consistently been the largest exporter of APIs such as Chlorpheniramine Maleate and Ketamine Hydrochloride from India.

As of October 2021, its products were exported to 1,296 clients across 86 countries. Around 77% of its revenue came from exports in FY21.

Financials

Revenue: 18%; Net Profit: 78% (FY19-21 CAGR)

Strengths

Accounted for 45-55% and 65-70%, respectively, of the Chlorpheniramine Maleate and Ketamine Hydrochloride exports from India between FY17-FY21
Increased share in Salbutamol Sulphate exports from 25-30% in FY17 to 35-40% in FY21
Improved debt-to-equity ratio - from 2.3x in FY18 to 0.2x in 6MFY22
Identifying off-patent generic molecules that fit into its production set-up

Risks

Operates in a highly regulated industry. Facilities and products are subject to periodic inspections or audits
High dependence on its 10 APIs, which account for over 80% of revenue
Pharma is a highly competitive industry
Faces competition from companies such as Divi’s Laboratories, Wanbury and Unichem and IPCA Labs

Good to know

The global pharmaceutical market is expected to grow at a CAGR of 6% to ₹1,730 billion by 2025. Also, the domestic formulations market is expected to grow at a CAGR of 11% over the next five years. Being one of the leading makers of APIs, Supriya Lifescience is well-placed to benefit from domestic and global tailwinds.

Timeline