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Sai Life Sciences Ltd IPO
Status: Closed
Overview
IPO date
11 Dec 2024 to 13 Dec 2024
Face value
₹ 1 per share
Price
₹ 522 to ₹549 per share
Issue Size
55421123 shares
(aggregating up to ₹ 3042.62 Cr)
(aggregating up to ₹ 3042.62 Cr)
Allotment Date
16 Dec 2024
Listing at
NSE
Issue type
Book Building
Sector
Healthcare
Objectives of Sai Life Sciences Ltd IPO
Initial public offering of 55,421,123* equity shares of face value of Re. 1 each ("Equity Shares") of Sai Life Sciences Limited (The "Company" or the "Company") for cash at a price of Rs. 549 per equity share (including a premium of Rs. 548 per equity share) ("Offer Price") aggregating to
Rs. 3042.62 crores (the "Offer") comprising a fresh issue of 17,304,189* equity shares of face value of Re. 1 each aggregating to Rs. 950.00 crores (the "Fresh Issue") and an offer for sale of 38,116,934* equity shares of face value of Re. 1 each aggregating to Rs. 2092.62 crores (the "Offer for Sale"), consisting of 6,454,780* equity shares of face value of Re. 1 each aggregating to Rs. 354.37 crores by Sai Qest Syn Private Limited ("Promoter Selling Shareholder"), 23,159,368* equity shares of face value of Re. 1 each aggregating to Rs. 1271.45 crores by tpg asia vii sf pte ltd ("TPG"), 6,210,186* equity shares of face value of Re. 1 each aggregating to
Rs. 340.94 crores by hbm private equity india (collectively with tpg, "Investor Selling Shareholders") and 2,292,600* equity shares of face value of Re. 1 each aggregating to Rs. 125.86 crores by certain persons listed in this prospectus (the "Other Selling Shareholders", as defined below) (the promoter selling shareholder, investor selling shareholders and other selling shareholders, the "Selling Shareholders" and such equity shares, the "Offered Shares").
*Subject to finalisation of basis of allotment
Objectives of Sai Life Sciences Ltd IPO
Initial public offering of 55,421,123* equity shares of face value of Re. 1 each ("Equity Shares") of Sai Life Sciences Limited (The "Company" or the "Company") for cash at a price of Rs. 549 per equity share (including a premium of Rs. 548 per equity share) ("Offer Price") aggregating to
Rs. 3042.62 crores (the "Offer") comprising a fresh issue of 17,304,189* equity shares of face value of Re. 1 each aggregating to Rs. 950.00 crores (the "Fresh Issue") and an offer for sale of 38,116,934* equity shares of face value of Re. 1 each aggregating to Rs. 2092.62 crores (the "Offer for Sale"), consisting of 6,454,780* equity shares of face value of Re. 1 each aggregating to Rs. 354.37 crores by Sai Qest Syn Private Limited ("Promoter Selling Shareholder"), 23,159,368* equity shares of face value of Re. 1 each aggregating to Rs. 1271.45 crores by tpg asia vii sf pte ltd ("TPG"), 6,210,186* equity shares of face value of Re. 1 each aggregating to
Rs. 340.94 crores by hbm private equity india (collectively with tpg, "Investor Selling Shareholders") and 2,292,600* equity shares of face value of Re. 1 each aggregating to Rs. 125.86 crores by certain persons listed in this prospectus (the "Other Selling Shareholders", as defined below) (the promoter selling shareholder, investor selling shareholders and other selling shareholders, the "Selling Shareholders" and such equity shares, the "Offered Shares").
*Subject to finalisation of basis of allotment
Sai Life Sciences Ltd IPO Strategy
- Increase cross-selling with existing customers and win new customers.
- Continue to build a strong commercial development and manufacturing portfolio of CMC capabilities.
- Pursue more integrated Discovery projects to drive customer stickiness along with larger integrated Discovery programs.
- Continue to expand our existing capacity and add new technical capabilities.
- Continue to drive operational excellence initiatives to improve profitability and return metrics.
- Continue to attract, train and retain quality talent to support our rapid growth.
About Sai Life Sciences Ltd
Sai Life Sciences Limited was originally incorporated as Sai Dru Syn Laboratories Limited' as a Public Limited Company, dated January 25, 1999, issued by the Registrar of Companies, Andhra Pradesh at Hyderabad. The Company received the Certificate of Commencement of Business from Registrar of Companies, Andhra Pradesh on February 17, 1999. Subsequently, the Company name was changed from Sai Dru Syn Laboratories Limited' to Sai Life Sciences Limited' dated December 16, 2003.
Thereafter, the name of the Company was changed from Sai Life Sciences Limited' to Sai Advantium Pharma Limited' dated August 30, 2006 issued by the Registrar of Companies, Andhra Pradesh. Subsequently, the Company name was changed from Sai Advantium Pharma Limited' to Sai Life Sciences Limited' and a fresh Certificate of Incorporation dated May 28, 2012 was issued by the Registrar of Companies, Andhra Pradesh at Hyderabad.
The Company is an innovator-focused contract research, development, and manufacturing organization (CRDMO). The Company provide end-to-end services across the drug discovery, development and manufacturing value chain, for small molecule NCE to global pharmaceutical innovators companies and biotechnology firms. It possess both (a) discovery / contract research and (b) CMC / CDMO capabilities.
Through the Scheme of Amalgamation, Prasad Drugs Limited was merged into the Company in 2004. The Company acquired Merrifield Pharma Private Limited in 2006. Later, the Company opened new areas of biology facility in Watertown (Greater Boston, MA) U.S.A. for innovative and creative small-molecule drugs in 2019. It launched Sai Nxt, an initiative to transform the organization into a new generation CDMO in 2020. It further added cellular analysis platforms at its discovery biology facility in Cambridge, Massachusetts, USA.
In 2021, the Company opened a new discovery biology facility at Unit II Plant in Hyderabad. In 2022, it opened the first set of new disconvery chemistry labs at Unit III Plant, Hyderabad.
In 2023, the Company opened high potency API manufacturing block at Unit IV Bidar Facility and has started API developability & formulations (D&F) capabilities at Unit II Hyderabad in 2024.
The Company is proposing to raise money from public through IPO by issue and allotment of 61,573,120 Equity Shares through Offer for Sale and a Fresh Issue aggregating to Rs 800 Crores Equity Shares.
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T&C*
Strengths vs Risks of Sai Life Sciences Ltd
Know the pros & cons
Strengths
One of the largest integrated Indian CRDMOs in terms of revenue from operations for the Financial Year 2024, acting as a one-stop platform for discovery, development and manufacturing.- CDMO platform with a diverse mix of commercial and under-development molecules.
- Fast-growing, integrated Discovery capabilities with focus on biology, chemistry and DMPK services.
- Long-standing relationship with a diverse base of existing and new customers.
- Modern R&D infrastructure with a differentiated delivery model and strong regulatory track-record.
- Experienced management team and Board supported by a qualified scientific talent pool.
- Strategic business investments with improving profitability metrics.
Risks
- Its financial performance depends on the company's ability to secure business from biotechnology and pharmaceutical customers and consequently its may be subject to risks, uncertainties and trends that affect the company customers in these industries over which the company has no control.
- Its business may be adversely affected by a failures to develop or manufacture commercially viable drugs, including for reasons that are not within the company control.
- The company may not be able to continue to serve its customers if the company fails to meet their standards in audits and inspections and this could significantly harm its reputation and result in the termination of ongoing projects by its customers.
- The company depends on its research and development activities generally for the company future growth and its inability to achieve the desired outcomes in the company research and development activities may result in customers opting to discontinue their partnerships with it.
- The company is subject to extensive government regulation, and if the company fails to obtain, maintain or renew its statutory and regulatory licenses, permits and approvals required to operate the company's business, results of operations and cash flows may be adversely affected.
- Manufacturing interruptions or delays could affect its ability to meet customer demand and lead to higher costs.
- The company generated a revenue of Rs.6,542.20 million and Rs.14,386.02 million for the six months period ended September 30, 2024 and year ended March 31, 2024 respectively from customers outside India, amounting to 97.40% and 97.95% of total revenue from contract research, development and manufacturing activities, respectively. Furthermore, The company is subject to risks associated with conducting business internationally, and any operational delays and/or additional financial burdens may affect its business and results of operations.
- Its largest customer contributed 8.00% and 9.55% of the total revenue from operation for the six months period ended September 30, 2024 and the year ended March 31, 2024 respectively. The potential loss of major customers or any of its large contracts could materially and adversely affect the company's business, financial condition and results of operations.
- The company conduct animal testing, which can result in adverse publicity liability and other issues, including potential disruption to its facilities as a result of protests against animal testing.
- Its subsidiary, Sai Life Sciences Inc. has incurred losses of Rs.45.66 million, Rs.150.60 million, Rs.125.97 million and Rs.93.10 million for the six months period ended September 30, 2024 and the Financial Years ended March 31, 2024, March 31, 2023 and March 31, 2022, respectively, and it may also incur losses in the future, which may adversely impact its business and the value of the Equity Shares.
- There have been instances in the past where the company has not made certain regulatory filings with the RoC or there were certain instances of discrepancies in relation to certain statutory filings and corporate records of the Company. Its cannot assure you that regulatory proceedings or actions will not be initiated against it in the future and the company will not be subject to any penalty imposed by the competent regulatory authority in this regard.
- The company purchased 14.88% and 11.43% of the cost of material, chemicals and reagents consumed from its three largest suppliers for the six months period ended September 30, 2024 and the Financial Year ended 2024, respectively. The company depends on a stable and adequate supply of quality raw materials from its suppliers (including international suppliers), and any increase in the price of raw materials or interruptions of such supply could have an adverse impact on its business.
- The company inability to safeguard the trade secrets, sensitive information and other business information of its customers and partners may have an adverse effect on the company's business.
- The company faces the risk of losing revenue from products supplied to innovator pharmaceutical companies after the expiry of their patent protection period.
- If the company is inadvertently infringe on the patents or intellectual property rights of others, its may be subjected to legal action and the company's business and reputation may be adversely affected.
- Fluctuations in exchange rates may result in foreign exchange losses and adversely impact its profitability.
- Under-utilization of its manufacturing capacities could result in excess production capacity and increased costs and an inability to expand the company manufacturing capacities could have an adverse effect on its business, future prospects and future financial performance.
- Outsourcing certain development steps to other outsourcing service providers may expose it to potential risks and liabilities.
- The attrition rate of its permanent employees, calculated based on the average number of employees for the six months period ended September 30, 2024 and the Financial Year 2024, was 10.87% (not annualized) and 24.70% respectively. Its business is dependent on experienced and skilled workforce and the company ability to attract and retain management and other employees, including scientific staff who are critical to its continued success. The loss of any such personnel or the company inability to recruit additional qualified personnel could adversely affect its business.
- Delay in delivery of its products from scheduled timeline of projects could have an adverse effect on the company's business, future prospects and future financial performance.
- Its inability to successfully implement the company's business plan and growth strategy could have an adverse effect on its business, results of operations, financial condition and cash flows.
- The company has significant working capital requirements. If its experience insufficient cash flows to fund the company working capital requirements and if its not able to provide collateral to obtain letters of credit and bank guarantees in sufficient quantities, there may be an adverse effect on its business, financial condition, results of operations and cash flow.
- Pricing pressure from customers may affect its gross margin, profitability and ability to increase the company prices, which in turn may materially adversely affect its business, results of operations and financial condition.
- The company is exposed to counterparty credit risk and any delay in receiving payments or non-receipt of payments may adversely impact its results of operations and cash flows.
- Any delay in payment of such statutory dues or non-payment of statutory dues in dispute may attract financial penalties from the respective government authorities and in turn may have an adverse impact on its financial condition and cash flows.
- The company relies on advanced information and communication systems to run its operations and are exposed to the risks generally associated with such information and communications systems.
- Reforms in the healthcare industry in India and other countries which the company operates in, and the uncertainty associated with pharmaceutical pricing and reimbursement could adversely affect the pricing and demand for its products.
- Non-compliance with and changes in, safety, health, environmental and labour laws and other applicable regulations, may adversely affect its business, results of operations, financial condition and cash flows.
- Inconsistencies in data periods presented in this Red Herring Prospectus for disclosure may affect the comparability and consistency of the data, leading to potential challenges in accurately assessing its results of operations.
- Any decrease in or discontinuation of incentives or export promotion schemes the company is entitled to may adversely affect its results of operations, cash flows and financial condition.
- Its inability to effectively accurately forecast demand for the company products and manage its inventory may have an adverse effect on the company's business, results of operations, financial condition and cash flows.
- The company is exposed to risks related to acquisitions, strategic investment and partnerships and its failure to execute these strategies effectively may affect the company's business operations.
- As a CRDMO, the company is subject to product and other liability risks that could adversely affect its results of operations, financial condition, liquidity, and cash flows.
- Its insurance coverage may not be sufficient or adequate to protect it against all losses or liabilities. If the company suffer a large uninsured loss or if its suffer an insured loss that significantly exceeds the company insurance coverage, its financial condition and results of operations may be adversely affected.
- Its inability to meet the company obligations, including financial and other covenants under its debt financing arrangements could adversely affect the company's business, results of operations and cash flows.
- If the company does not enhance its existing technologies or introduce new technologies or offerings in a timely manner, its technologies or offerings may become obsolete or uncompetitive over time.
- The Company, Directors, Promoters and Subsidiaries are or may be involved in certain legal and regulatory proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business, financial condition, cash flows and results of operations.
- Certain of its Promoters have pledged their Equity Shares with a lender. Any exercise of such pledge by the lender could dilute the shareholding of the Promoters, which may adversely affect its business and share price.
- The Company has issued Equity Shares in the last 12 months at a price which may be lower than the Offer Price. The price at which Equity Shares have been issued by the Company in the preceding one year is not indicative of the price at which they will be issued or traded after listing.
- Some of its shareholders have transferred 2,044,330 Equity Shares to the company Promoter and certain Promoter Group entities as a gift contemplated under the Gift Deed which has resulted in an increase in the pre-Offer shareholding of the Promoters and certain Promoter Group entities. The said transfers will result in a gain of Rs.[*] million at the upper end of the price band to Promoters and certain Promoter Group members.
- The company enter into certain related party transactions in the ordinary course of its business and the company cannot assure you that such transactions will not have an adverse effect on its results of operation and financial condition.
- The company has certain contingent liabilities, which, if they materialize, may affect its results of operations, financial condition and cash flows.
- The CDRMO industry is intensely competitive and its inability to compete effectively may adversely affect the company's business, results of operations and financial condition and cash flows.
- Its failure to maintain or increase the company marketing activities and capabilities could adversely affect its market share and the company reputation, business, financial condition and results of operations.
- The company could be materially adversely affected by violations of the U.S. Foreign Corrupt Practices Act, 1977 and similar anti-corruption, anti-bribery and anti-kickback laws.
- Its customer contracts are governed by the laws of various countries and disputes arising from such contracts may be subject to the exclusive jurisdiction of courts situated in such countries, and managing such disputes may result in greater costs for the Company.
- Its ability to pay dividends in the future will depends on the company earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.
- The company has commissioned an industry report from Frost & Sullivan which have been used for industry related data in this RHP and such data has not been independently verified by it.
- Its Corporate Office, Unit II Hyderabad Facility, Greater Boston Facility and Manchester Facility are located on leased premises. There can be no assurance that such lease agreements will be renewed upon termination or that the company will be able to obtain other premises on lease on the same or similar commercial terms.
- The company track certain operational performance metrics including certain non-GAAP financial measures with internal systems and tools. Some of these operational performance metrics may differ from similar metrics published by other companies, including peer companies and hence their comparability may be limited.
- Its profit after tax has increased from Rs.62.26 million in the Financial Year 2022 to Rs.828.09 million in the Financial Year 2024 and increased from Rs.(129.24) million for the six months period ended September 30, 2023 to Rs.280.12 million for the six months period ended September 30, 2024. Its historical increase in revenue and increase in profits may not be indicative of the company future performance.
- Its leverage ratios, finance costs, the volume of loans outstanding, and working capital components for which issue proceeds are proposed, present certain risks which could materially impact the financial condition and operations of the Company.
- The cost to develop and commercialize a new drug and lengthy research and development processes in the drug commercialization journey with low success rates may have an adverse effect on its business, results of operations, financial condition and cash flows.
- Its CRDMO business allows multiple entry points for client engagement, which may result in loss of customers, and this may have an adverse effect on the company's business, results of operations, financial condition and cash flows.
- Uncertainty in continuous improvement investments may have an adverse effect on its business, results of operations, financial condition and cash flows.
- A portion of the Net Proceeds may be utilized for repayment or pre-payment of loans taken from Kotak Mahindra Bank Limited, which is an affiliate of one of the Book Running Lead Managers.
Sai Life Sciences Ltd Peer Comparison
Understand the company’s industry standing
Sai Life Sciences Ltd
Divi's Laboratories Ltd
Suven Pharmaceuticals Ltd
Face Value
1
2
1
Standalone / Consolidated
Consolidated
Consolidated
Consolidated
Total Income Rs. Cr.
1465.178
7845
1051.354
EPS-Basis
4.57
60.27
11.8
EPS-Diluted
4.53
60.27
11.8
NAV Per Share
53.83
511.21
94.04
P/E-Basic EPS
---
103.04
109.37
P/E-Diluted EPS
---
---
---
RONW(%)
8.5
11.79
14.64
Latest NAV Period
---
---
---
Latest NAV
---
---
---
How to check the allotment status of Sai Life Sciences Ltd IPO?
Follow the steps
Open link to the registrar using this URL (https://evault.kfintech.com/ipostatus/).
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The IPO opens on 11 Dec 2024 & closes on 13 Dec 2024.
Sai Life Sciences Limited was originally incorporated as Sai Dru Syn Laboratories Limited' as a Public Limited Company, dated January 25, 1999, issued by the Registrar of Companies, Andhra Pradesh at Hyderabad. The Company received the Certificate of Commencement of Business from Registrar of Companies, Andhra Pradesh on February 17, 1999. Subsequently, the Company name was changed from Sai Dru Syn Laboratories Limited' to Sai Life Sciences Limited' dated December 16, 2003.
Thereafter, the name of the Company was changed from Sai Life Sciences Limited' to Sai Advantium Pharma Limited' dated August 30, 2006 issued by the Registrar of Companies, Andhra Pradesh. Subsequently, the Company name was changed from Sai Advantium Pharma Limited' to Sai Life Sciences Limited' and a fresh Certificate of Incorporation dated May 28, 2012 was issued by the Registrar of Companies, Andhra Pradesh at Hyderabad.
The Company is an innovator-focused contract research, development, and manufacturing organization (CRDMO). The Company provide end-to-end services across the drug discovery, development and manufacturing value chain, for small molecule NCE to global pharmaceutical innovators companies and biotechnology firms. It possess both (a) discovery / contract research and (b) CMC / CDMO capabilities.
Through the Scheme of Amalgamation, Prasad Drugs Limited was merged into the Company in 2004. The Company acquired Merrifield Pharma Private Limited in 2006. Later, the Company opened new areas of biology facility in Watertown (Greater Boston, MA) U.S.A. for innovative and creative small-molecule drugs in 2019. It launched Sai Nxt, an initiative to transform the organization into a new generation CDMO in 2020. It further added cellular analysis platforms at its discovery biology facility in Cambridge, Massachusetts, USA.
In 2021, the Company opened a new discovery biology facility at Unit II Plant in Hyderabad. In 2022, it opened the first set of new disconvery chemistry labs at Unit III Plant, Hyderabad.
In 2023, the Company opened high potency API manufacturing block at Unit IV Bidar Facility and has started API developability & formulations (D&F) capabilities at Unit II Hyderabad in 2024.
The Company is proposing to raise money from public through IPO by issue and allotment of 61,573,120 Equity Shares through Offer for Sale and a Fresh Issue aggregating to Rs 800 Crores Equity Shares.
Sai Life Sciences Ltd IPO will close on 13 Dec 2024.
- One of the largest integrated Indian CRDMOs in terms of revenue from operations for the Financial Year 2024, acting as a one-stop platform for discovery, development and manufacturing.
- CDMO platform with a diverse mix of commercial and under-development molecules.
- Fast-growing, integrated Discovery capabilities with focus on biology, chemistry and DMPK services.
- Long-standing relationship with a diverse base of existing and new customers.
- Modern R&D infrastructure with a differentiated delivery model and strong regulatory track-record.
- Experienced management team and Board supported by a qualified scientific talent pool.
- Strategic business investments with improving profitability metrics.
| S.No | Promoters Name | Pre Issue Shares | Pre Issue Percentage | Post Issue Shares | Post Issue Percentage |
|---|---|---|---|---|---|
| 1 | Kanumuri Rangaraju | 169340 | 0.09 | 169340 | 0.08 |
| 2 | Krsihnam Raju Kanumuri | 3008400 | 1.56 | 3008400 | 1.45 |
| 3 | Mytreyi Kanumuri | 61580 | 0.03 | 61580 | 0.03 |
| 4 | Sai Quest Syn Pvt Ltd | 11045880 | 5.74 | 4591100 | 2.21 |
| 5 | Marigold Partners | 22185550 | 11.53 | 22185550 | 10.67 |
| 6 | Sunflower Partners | 15593570 | 8.11 | 15593570 | 7.5 |
| 7 | Tulip Partners | 9282060 | 4.83 | 9282060 | 4.46 |
| 8 | Lily Partners | 6900740 | 3.59 | 6900740 | 3.32 |
| 9 | Gokaraju Subba Raju | 9634450 | 5.01 | 9634450 | 5.01 |
| 10 | Gokaraju Lakshmi Tanuja | 1333750 | 0.69 | 1333750 | 0.69 |
| 11 | Kanumuri Sudha | 513160 | 0.27 | 513160 | 0.27 |
| 12 | Continental Wines Pvt Ltd | 20190 | 0.01 | 20190 | 0.01 |
- Its financial performance depends on the company's ability to secure business from biotechnology and pharmaceutical customers and consequently its may be subject to risks, uncertainties and trends that affect the company customers in these industries over which the company has no control.
- Its business may be adversely affected by a failures to develop or manufacture commercially viable drugs, including for reasons that are not within the company control.
- The company may not be able to continue to serve its customers if the company fails to meet their standards in audits and inspections and this could significantly harm its reputation and result in the termination of ongoing projects by its customers.
- The company depends on its research and development activities generally for the company future growth and its inability to achieve the desired outcomes in the company research and development activities may result in customers opting to discontinue their partnerships with it.
- The company is subject to extensive government regulation, and if the company fails to obtain, maintain or renew its statutory and regulatory licenses, permits and approvals required to operate the company's business, results of operations and cash flows may be adversely affected.
- Manufacturing interruptions or delays could affect its ability to meet customer demand and lead to higher costs.
- The company generated a revenue of Rs.6,542.20 million and Rs.14,386.02 million for the six months period ended September 30, 2024 and year ended March 31, 2024 respectively from customers outside India, amounting to 97.40% and 97.95% of total revenue from contract research, development and manufacturing activities, respectively. Furthermore, The company is subject to risks associated with conducting business internationally, and any operational delays and/or additional financial burdens may affect its business and results of operations.
- Its largest customer contributed 8.00% and 9.55% of the total revenue from operation for the six months period ended September 30, 2024 and the year ended March 31, 2024 respectively. The potential loss of major customers or any of its large contracts could materially and adversely affect the company's business, financial condition and results of operations.
- The company conduct animal testing, which can result in adverse publicity liability and other issues, including potential disruption to its facilities as a result of protests against animal testing.
- Its subsidiary, Sai Life Sciences Inc. has incurred losses of Rs.45.66 million, Rs.150.60 million, Rs.125.97 million and Rs.93.10 million for the six months period ended September 30, 2024 and the Financial Years ended March 31, 2024, March 31, 2023 and March 31, 2022, respectively, and it may also incur losses in the future, which may adversely impact its business and the value of the Equity Shares.
- There have been instances in the past where the company has not made certain regulatory filings with the RoC or there were certain instances of discrepancies in relation to certain statutory filings and corporate records of the Company. Its cannot assure you that regulatory proceedings or actions will not be initiated against it in the future and the company will not be subject to any penalty imposed by the competent regulatory authority in this regard.
- The company purchased 14.88% and 11.43% of the cost of material, chemicals and reagents consumed from its three largest suppliers for the six months period ended September 30, 2024 and the Financial Year ended 2024, respectively. The company depends on a stable and adequate supply of quality raw materials from its suppliers (including international suppliers), and any increase in the price of raw materials or interruptions of such supply could have an adverse impact on its business.
- The company inability to safeguard the trade secrets, sensitive information and other business information of its customers and partners may have an adverse effect on the company's business.
- The company faces the risk of losing revenue from products supplied to innovator pharmaceutical companies after the expiry of their patent protection period.
- If the company is inadvertently infringe on the patents or intellectual property rights of others, its may be subjected to legal action and the company's business and reputation may be adversely affected.
- Fluctuations in exchange rates may result in foreign exchange losses and adversely impact its profitability.
- Under-utilization of its manufacturing capacities could result in excess production capacity and increased costs and an inability to expand the company manufacturing capacities could have an adverse effect on its business, future prospects and future financial performance.
- Outsourcing certain development steps to other outsourcing service providers may expose it to potential risks and liabilities.
- The attrition rate of its permanent employees, calculated based on the average number of employees for the six months period ended September 30, 2024 and the Financial Year 2024, was 10.87% (not annualized) and 24.70% respectively. Its business is dependent on experienced and skilled workforce and the company ability to attract and retain management and other employees, including scientific staff who are critical to its continued success. The loss of any such personnel or the company inability to recruit additional qualified personnel could adversely affect its business.
- Delay in delivery of its products from scheduled timeline of projects could have an adverse effect on the company's business, future prospects and future financial performance.
- Its inability to successfully implement the company's business plan and growth strategy could have an adverse effect on its business, results of operations, financial condition and cash flows.
- The company has significant working capital requirements. If its experience insufficient cash flows to fund the company working capital requirements and if its not able to provide collateral to obtain letters of credit and bank guarantees in sufficient quantities, there may be an adverse effect on its business, financial condition, results of operations and cash flow.
- Pricing pressure from customers may affect its gross margin, profitability and ability to increase the company prices, which in turn may materially adversely affect its business, results of operations and financial condition.
- The company is exposed to counterparty credit risk and any delay in receiving payments or non-receipt of payments may adversely impact its results of operations and cash flows.
- Any delay in payment of such statutory dues or non-payment of statutory dues in dispute may attract financial penalties from the respective government authorities and in turn may have an adverse impact on its financial condition and cash flows.
- The company relies on advanced information and communication systems to run its operations and are exposed to the risks generally associated with such information and communications systems.
- Reforms in the healthcare industry in India and other countries which the company operates in, and the uncertainty associated with pharmaceutical pricing and reimbursement could adversely affect the pricing and demand for its products.
- Non-compliance with and changes in, safety, health, environmental and labour laws and other applicable regulations, may adversely affect its business, results of operations, financial condition and cash flows.
- Inconsistencies in data periods presented in this Red Herring Prospectus for disclosure may affect the comparability and consistency of the data, leading to potential challenges in accurately assessing its results of operations.
- Any decrease in or discontinuation of incentives or export promotion schemes the company is entitled to may adversely affect its results of operations, cash flows and financial condition.
- Its inability to effectively accurately forecast demand for the company products and manage its inventory may have an adverse effect on the company's business, results of operations, financial condition and cash flows.
- The company is exposed to risks related to acquisitions, strategic investment and partnerships and its failure to execute these strategies effectively may affect the company's business operations.
- As a CRDMO, the company is subject to product and other liability risks that could adversely affect its results of operations, financial condition, liquidity, and cash flows.
- Its insurance coverage may not be sufficient or adequate to protect it against all losses or liabilities. If the company suffer a large uninsured loss or if its suffer an insured loss that significantly exceeds the company insurance coverage, its financial condition and results of operations may be adversely affected.
- Its inability to meet the company obligations, including financial and other covenants under its debt financing arrangements could adversely affect the company's business, results of operations and cash flows.
- If the company does not enhance its existing technologies or introduce new technologies or offerings in a timely manner, its technologies or offerings may become obsolete or uncompetitive over time.
- The Company, Directors, Promoters and Subsidiaries are or may be involved in certain legal and regulatory proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business, financial condition, cash flows and results of operations.
- Certain of its Promoters have pledged their Equity Shares with a lender. Any exercise of such pledge by the lender could dilute the shareholding of the Promoters, which may adversely affect its business and share price.
- The Company has issued Equity Shares in the last 12 months at a price which may be lower than the Offer Price. The price at which Equity Shares have been issued by the Company in the preceding one year is not indicative of the price at which they will be issued or traded after listing.
- Some of its shareholders have transferred 2,044,330 Equity Shares to the company Promoter and certain Promoter Group entities as a gift contemplated under the Gift Deed which has resulted in an increase in the pre-Offer shareholding of the Promoters and certain Promoter Group entities. The said transfers will result in a gain of Rs.[*] million at the upper end of the price band to Promoters and certain Promoter Group members.
- The company enter into certain related party transactions in the ordinary course of its business and the company cannot assure you that such transactions will not have an adverse effect on its results of operation and financial condition.
- The company has certain contingent liabilities, which, if they materialize, may affect its results of operations, financial condition and cash flows.
- The CDRMO industry is intensely competitive and its inability to compete effectively may adversely affect the company's business, results of operations and financial condition and cash flows.
- Its failure to maintain or increase the company marketing activities and capabilities could adversely affect its market share and the company reputation, business, financial condition and results of operations.
- The company could be materially adversely affected by violations of the U.S. Foreign Corrupt Practices Act, 1977 and similar anti-corruption, anti-bribery and anti-kickback laws.
- Its customer contracts are governed by the laws of various countries and disputes arising from such contracts may be subject to the exclusive jurisdiction of courts situated in such countries, and managing such disputes may result in greater costs for the Company.
- Its ability to pay dividends in the future will depends on the company earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.
- The company has commissioned an industry report from Frost & Sullivan which have been used for industry related data in this RHP and such data has not been independently verified by it.
- Its Corporate Office, Unit II Hyderabad Facility, Greater Boston Facility and Manchester Facility are located on leased premises. There can be no assurance that such lease agreements will be renewed upon termination or that the company will be able to obtain other premises on lease on the same or similar commercial terms.
- The company track certain operational performance metrics including certain non-GAAP financial measures with internal systems and tools. Some of these operational performance metrics may differ from similar metrics published by other companies, including peer companies and hence their comparability may be limited.
- Its profit after tax has increased from Rs.62.26 million in the Financial Year 2022 to Rs.828.09 million in the Financial Year 2024 and increased from Rs.(129.24) million for the six months period ended September 30, 2023 to Rs.280.12 million for the six months period ended September 30, 2024. Its historical increase in revenue and increase in profits may not be indicative of the company future performance.
- Its leverage ratios, finance costs, the volume of loans outstanding, and working capital components for which issue proceeds are proposed, present certain risks which could materially impact the financial condition and operations of the Company.
- The cost to develop and commercialize a new drug and lengthy research and development processes in the drug commercialization journey with low success rates may have an adverse effect on its business, results of operations, financial condition and cash flows.
- Its CRDMO business allows multiple entry points for client engagement, which may result in loss of customers, and this may have an adverse effect on the company's business, results of operations, financial condition and cash flows.
- Uncertainty in continuous improvement investments may have an adverse effect on its business, results of operations, financial condition and cash flows.
- A portion of the Net Proceeds may be utilized for repayment or pre-payment of loans taken from Kotak Mahindra Bank Limited, which is an affiliate of one of the Book Running Lead Managers.
The Issue type of Sai Life Sciences Ltd is Book Building.
The minimum application for shares of Sai Life Sciences Ltd is 27.
The total shares issue of Sai Life Sciences Ltd is 55421123.
Initial public offering of 55,421,123* equity shares of face value of Re. 1 each ("Equity Shares") of Sai Life Sciences Limited (The "Company" or the "Company") for cash at a price of Rs. 549 per equity share (including a premium of Rs. 548 per equity share) ("Offer Price") aggregating to
Rs. 3042.62 crores (the "Offer") comprising a fresh issue of 17,304,189* equity shares of face value of Re. 1 each aggregating to Rs. 950.00 crores (the "Fresh Issue") and an offer for sale of 38,116,934* equity shares of face value of Re. 1 each aggregating to Rs. 2092.62 crores (the "Offer for Sale"), consisting of 6,454,780* equity shares of face value of Re. 1 each aggregating to Rs. 354.37 crores by Sai Qest Syn Private Limited ("Promoter Selling Shareholder"), 23,159,368* equity shares of face value of Re. 1 each aggregating to Rs. 1271.45 crores by tpg asia vii sf pte ltd ("TPG"), 6,210,186* equity shares of face value of Re. 1 each aggregating to
Rs. 340.94 crores by hbm private equity india (collectively with tpg, "Investor Selling Shareholders") and 2,292,600* equity shares of face value of Re. 1 each aggregating to Rs. 125.86 crores by certain persons listed in this prospectus (the "Other Selling Shareholders", as defined below) (the promoter selling shareholder, investor selling shareholders and other selling shareholders, the "Selling Shareholders" and such equity shares, the "Offered Shares").
*Subject to finalisation of basis of allotment