Sai Parenterals shares list at 3% premium to IPO price on BSE, NSE
Sai Parenterals made its debut on Dalal Street with a slight uptick in share prices. Despite the company’s promising diversification in pharmaceuticals and expansion ambitions, the IPO experienced tepid subscription rates, largely attributed to a ...
By ETMarkets.com | Updated:
ETMarkets.com
Shares of Sai Parenterals made a decent Dalal Street debut on Thursday, listing at a 3% premium to its IPO price. The stock opened at Rs 405 on the BSE and Rs 400 on the NSE, compared with its issue price of Rs 392.
The IPO, priced in the range of Rs 372-392 per share, saw an overall subscription of just 1.08 times, suggesting limited enthusiasm despite a diversified pharmaceutical business and expansion-led growth plans.
The biggest drag on the issue came from retail investors, where the IPO was subscribed a mere 0.12 times, one of the weakest responses seen in recent offerings. This sharp undersubscription in the retail segment signals a clear shift in investor behaviour, with individuals turning cautious after a phase of inconsistent listing gains and negative post-listing returns across several IPOs.
In contrast, institutional participation remained relatively stable. Qualified institutional buyers subscribed their portion 1.73 times, while non-institutional investors (NIIs) bid 2.45 times, helping the issue scrape through full subscription.
Sai Parenterals, while operating in a stable pharmaceutical segment, appears to have been priced aggressively. At the upper band, the company commands a P/E of over 70 times, which may have deterred retail participation, according to analysts.
The company operates across branded generics and contract development and manufacturing (CDMO), with a diversified portfolio spanning cardiovascular, anti-diabetic, respiratory and other therapeutic segments.
It has also expanded into exports after acquiring internationally accredited facilities, targeting regulated and semi-regulated markets such as Australia, Southeast Asia and the Middle East.
Proceeds from the IPO will be used for capacity expansion, R&D, debt repayment and working capital, indicating a focus on scaling operations.
However, profitability metrics remain moderate, with return ratios and margins not yet fully reflecting the high valuation multiple, which likely weighed on investor appetite.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
The IPO, priced in the range of Rs 372-392 per share, saw an overall subscription of just 1.08 times, suggesting limited enthusiasm despite a diversified pharmaceutical business and expansion-led growth plans.
Retail interest collapses
The biggest drag on the issue came from retail investors, where the IPO was subscribed a mere 0.12 times, one of the weakest responses seen in recent offerings. This sharp undersubscription in the retail segment signals a clear shift in investor behaviour, with individuals turning cautious after a phase of inconsistent listing gains and negative post-listing returns across several IPOs.
In contrast, institutional participation remained relatively stable. Qualified institutional buyers subscribed their portion 1.73 times, while non-institutional investors (NIIs) bid 2.45 times, helping the issue scrape through full subscription.
Valuations dent sentiment
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Sai Parenterals, while operating in a stable pharmaceutical segment, appears to have been priced aggressively. At the upper band, the company commands a P/E of over 70 times, which may have deterred retail participation, according to analysts.
Business fundamentals intact, but valuation a concern
The company operates across branded generics and contract development and manufacturing (CDMO), with a diversified portfolio spanning cardiovascular, anti-diabetic, respiratory and other therapeutic segments.
It has also expanded into exports after acquiring internationally accredited facilities, targeting regulated and semi-regulated markets such as Australia, Southeast Asia and the Middle East.
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Proceeds from the IPO will be used for capacity expansion, R&D, debt repayment and working capital, indicating a focus on scaling operations.
However, profitability metrics remain moderate, with return ratios and margins not yet fully reflecting the high valuation multiple, which likely weighed on investor appetite.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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