Please refer to important disclosures at the end of this report
1
Supriya Lifescience Limited was incorporated in March 2008 by Satish
Waman Wagh. Company is one of the key Indian manufacturers and
suppliers of active pharmaceutical ingredients (APIs). Supriya Lifescience
Limited focus on research and development along with this company focus is
on diverse therapeutic areas and niche products. Company has niche product
offerings of 38 APIs focused on diverse therapeutic segments such as
antihistamine, analgesic, anaesthetic, vitamin, anti-asthmatic and anti-
allergic. Company export to 86 countries to 1296 customers including 346
distributors. Companies manufacturing plant located at Maharashtra, which
is spread across 23806 sq. mt.
Positives: (a) (a) Backward integration of API business, lead to better margins and
reduce dependency on import of raw material, 12 of existing products are
backward integrated which contributes 67.1% of revenue. (b) Export contributes to
77.5% of FY2021 revenue, company export to 86 countries like Latin America,
Europe, China and Cambodia etc. (c) Company has niche product offerings of 38
APIs focused on diverse therapeutic segments and company has filled have filed
14 active DMFs with USFDA and 8 active CEPs.
Investment concerns: (a) High customer concentration, Top-10 customers
contributes to 47% of H1FY22 revenue, any loss of a customer can be a risk. (b)
The company already has a high export market share in key APIs, it will be
changing for the company to increase its market share further. (c) In the last 3
years, companies’ gross margin and EBITDA margins have increased significantly,
it will be difficult for the company to improve margins from these levels.
Outlook & Valuation: Based on FY2021 numbers, the IPO is priced at an
EV/EBITDA of 11.2 times and price to earnings of 16.2 times at the upper price
band of the IPO. Supriya Lifescience Limited focuses on research & development
and having a diversified niche product portfolio of API’s. Companies 77.5% of
revenue comes from the Export market, companies’ key market 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. Hence, we are
assigning a “SUBSCRIBE” recommendation to the Supriya Lifescience Limited IPO.
Key Financials
Y/E March (₹ cr)
FY19
FY20
FY21
H1FY22
Net Sales
277.8
311.6
385.3
224.8
% chg
-
12
23.7
-
Net Profit
39.5
73
123.8
65.9
% chg
-
86
68.7
-
EBITDA (%)
26.2
35.1
46.2
43.9
EPS (as stated)
5.4
10.0
16.9
9.0
P/E (x)
50.9
27.3
16.2
15.2
P/BV (x)
21.3
13.4
7.4
6.0
EV/EBITDA
27.7
18.5
11.2
5.1
EV/Sales
7.3
6.5
5.2
2.2
Source: Company, Angel Research
SUBSCRIBE
Issue Open: Dec 16, 2021
Issue Close: Dec 20, 2021
Offer for Sale: `500 cr
QIBs 75% of issue
Non-Institutional 15% of issue
Retail 10% of issue
Promoters 67.6%
Others 32.4%
Fresh issue: `200 cr
Issue Details
Face Value: `2
Present Eq. Paid up Capital: `14.64 cr
Post Issue Shareholding Pattern
Post Eq. Paid up Capital: `16.09 cr
Issue size (amount): `700 cr
Price Band: 265 - ₹274
Lot Size: 54 shares and in multiple thereafter
Post-issue mkt. cap: * `2,139 cr - ** `2,205 cr
Promoters holding Pre-Issue: 99.26%
Promoters holding Post-Issue: 67.59%
*Calculated on lower price band
** Calculated on upper price band
Book Building
SUPRIYA LIFESCIENCE LIMITED
IPO NOTE
SUPRIYA LIFESCIENCE LIMITED
December 15, 2021
Supriya Lifescience Limited | IPO Note
December 15, 2021
2
Company background
Supriya Lifescience Limited was incorporated in March 2008 by Satish Waman
Wagh. Pre IPO promoter still holds 99.26% of the company. Company is one of
the key Indian manufacturers and suppliers of active pharmaceutical ingredients
(APIs) with focus on research and development along with this company focus is
on diverse therapeutic areas and niche products.
Company has niche product offerings of 38 APIs focused on diverse therapeutic
segments such as antihistamine, analgesic, anaesthetic, vitamin, anti-asthmatic
and anti-allergic.
Company’s products are registered with various international regulatory
authorities such as USFDA, EDQM, etc. As of now, company have filed 14 active
DMFs with USFDA and 8 active CEPs with EDQM, for their API products in
different therapeutic areas.
Company consistently been the largest exporter of Chlorpheniramine Maleate and
Ketamine Hydrochloride from India. They were among the largest exporters of
Salbutamol Sulphate contributing to 31% of the API exports from India in FY 2021
in volume terms. Export contributes to 77.47% of FY2021 revenues, Company
export to 86 countries to 1296 customers including 346 distributors.
Companies manufacturing plant located at Maharashtra, which is spread across
23,806 sq. mt. The company has 4 blocks of which 4th block recently commenced
in May 2021.
Issue details
The IPO is made up of offer for sale of ₹500 Cr by promoter and fresh issue of
`200 Cr, total issue size of ₹700 Cr
Pre & Post Shareholding
(Pre-issue)
(Post-issue)
Particular
No of shares
%
No of shares
%
Promoter
4,74,58,070
99.26%
5,43,94,215
67.58%
Promoter Group
9,96,45,055
0.72%
2,55,62,085
0.65%
Public
13,08,323
0.02%
5,26,500
31.76%
Total
14,84,11,448
100.0%
8,04,82,800
100.0%
Source: Company, Angel Research
Supriya Lifescience Limited | IPO Note
December 15, 2021
3
Objectives of the Offer
Funding capital expenditure requirements of the company.
Repayment certain borrowings.
General Corporate Purposes.
Key Management Personnel
Satish Waman Wagh is the Promoter, Chairman and Managing Director of the
company. He has been a director on the Board since incorporation. Apart from his
association with the company, he is a director on the boards of Supriya Medi-
Chem Pvt Ltd, Lote Industries Testing Laboratory Association and Sachin
Industries Ltd.
Smita Satish Wagh is the Whole-time Director of the company. She has been a
director on the Board since incorporation. Apart from her association with the
company, she is a director on the boards of Supriya Medi-Chem Pvt Ltd.
Balasaheb Gulabrao Sawant is the Whole-time Director of the company. He was
previously associated with companies such as USV Ltd, Encure Pharmaceuticals
Ltd, Arch Pharmalabs Ltd, Mylan Laboratories Ltd and Enaltec Labs Pvt Ltd.
Kedar Shankar Karmarkar is the Independent Director of the company. He was
previously associated with Ciba-Geigy AG as a trainee and with the laboratory of
Institut Fur Organische Chemie Der Universitat Basel as a research fellow. He was
previously employed with Nicholas Piramal India Limited as an executive in the
R&D department.
Shireesh Bhalchandra Ambhaikar is the Chief Executive Officer of the company.
He joined the company on July 6, 2021.
Ashish Ramdas Nayak is the Chief Financial Officer of the company. He joined
the company on August 5, 2019.
Shweta Shivdhari Singh is the Company Secretary and Compliance Officer of the
company. She was appointed as the Company Secretary on August 26, 2019 and
was appointed as the Compliance Officer on May 6, 2021.
Supriya Lifescience Limited | IPO Note
December 15, 2021
4
Exhibit 1: Consolidated Profit & Loss Account
Y/E March (₹ cr)
FY19
FY20
FY21
H1FY22
Total operating income
277.8
311.6
385.3
224.8
% chg
-
12
23.7
-
Total Expenditure
213
213
218
131
Raw Material
147
139
128
83
Employee Benefit Expense
19
26
33
18
Other Expenses
47
49
57
30
EBITDA
65
99
167
94
% chg
-
52
70
-
(% of Net Sales)
23.4
31.6
43.4
41.6
Depreciation & amortisation
5.4
6.3
6.6
4.9
EBIT
59.5
92.2
160.8
88.6
% chg
-
55
74
-
(% of Net Sales)
21.4
29.6
41.7
39.4
Interest & other Charges
10
7
4
2
Other Income
8.0
11.0
10.8
5.2
(% of Sales)
2.9
3.5
2.8
2.3
PBT
57.1
96.2
167.3
91.6
(% of Net Sales)
20.6
30.9
43.4
40.7
Tax
17.6
22.8
43.5
25.7
PAT (reported)
39.5
73.4
123.8
65.9
% chg
-
85.8
68.7
(% of Net Sales)
14.2
23.6
32.1
29.3
EPS (as stated)
5.39
10.0
16.9
9.0
% chg
-
86.2
68.7
Source: Company, Angel Research
Supriya Lifescience Limited | IPO Note
December 15, 2021
5
Exhibit 2: Consolidated Balance Sheet
Y/E March (₹ cr)
FY19
FY20
FY21
H1FY22
SOURCES OF FUNDS
Equity Share Capital
14.6
14.6
14.6
14.6
Other equity
79
135
254
320
Shareholders Funds
94
149
269
335
Total Loans
24
31
29
14
Other liabities
0.7
1.0
1.3
2.2
Total Liabilities
118
181
300
351
APPLICATION OF FUNDS
Net Block
120
138
179
183
Current Assets
133
198
266
320
Sundry Debtors
60
52
74
84
Cash & Bank Balance
2
2
43
79
Other Assets
28
93
75
67
Current liabilities
135
155
146
153
Net Current Assets
-2
43
120
167
Other Non Current Asset
0.1
0.2
0.5
0.5
Total Assets
118
181
300
351
Source: Company, Angel Research
Supriya Lifescience Limited | IPO Note
December 15, 2021
6
Exhibit 3: Consolidated Cash Flow Statement
Y/E March (₹ cr)
FY19
FY20
FY21
H1FY22
Restated Profit before tax
57.1
96.2
167.3
91.6
Depreciation
5.4
6.3
6.6
4.9
Change in Working Capital
(17.2)
(1.5)
(44.5)
(26.5)
Interest Expense
9.9
6.8
4.0
2.0
Direct Tax Paid
(14.0)
(27.0)
(29.9)
(18.3)
Others
6.9
3.8
(1.4)
(1.1)
Cash Flow from Operations
48.6
116.0
79.9
15.8
(Inc.)/ Dec. in Fixed Assets
4.8
(24.5)
(47.4)
(9.6)
Cash Flow from Investing
4.8
(24.5)
(47.4)
(9.6)
Proceeds from Long Term Borrowing
(27.1)
(5.7)
(2.3)
-
Proceeds from Short Term Borrowing
(13.3)
(1.8)
(9.6)
0.9
Interest paid
0.0
(9.2)
(4.0)
1.1
Others
-
(17.6)
(3.9)
-
Cash Flow from Financing
(49.6)
(29.1)
(14.7)
1.8
Inc./(Dec.) in Cash
3.7
62.3
17.5
8.0
Opening Cash balances
8.6
12.3
74.7
92.2
Closing Cash balances
12.3
74.7
92.2
100.2
Source: Company, Angel Research
Exhibit 4: Key Ratios
Y/E March
FY19
FY20
FY21
H1FY22
Valuation Ratio (x)
P/E (on FDEPS)
50.9
27.3
16.2
15.2
P/CEPS
44.0
25.8
15.3
13.3
P/BV
21.3
13.4
7.4
6.0
EV/Sales
7.3
6.5
5.2
4.5
EV/EBITDA
27.7
18.5
11.2
10.2
Per Share Data (₹)
EPS (fully diluted )
5.39
10.03
16.92
9.01
Cash EPS
6.2
10.6
17.9
10.3
Book Value
12.8
20.4
36.8
45.9
DPS
-
-
-
Number of share
7.30
7.30
7.30
7.30
Returns (%)
RONW
42%
49%
46%
39%
ROCE
57%
57%
57%
53%
Turnover ratios (x)
Asset Turnover (net)
3.3
3.2
3.9
3.0
Receivables (days)
78.7
61.4
69.8
68.4
Inventory Days
14.4
23.2
33.2
33.7
Payables (days)
75.6
84.4
85.4
78.0
Working capital cycle (days)
17.5
0.1
17.6
24.1
Source: Company, Angel Research
Supriya Lifescience Limited | IPO Note
December 15, 2021
7
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