The initial public offering (IPO) of Bengaluru-based Sagility India saw a lukewarm start, with only 23% subscription on the first day and just over halfway on the second. However, by the final day, investor bids reached 1.05 times the offered shares, meeting the IPO’s target.
IPO Details and Market Sentiment
- Price Band: ₹28-30 per share.
- Fundraising Goal: ₹2,106.60 crore through an offer-for-sale (OFS) by company promoters.
- Subscription:
- Retail investors: 3.08 times subscribed.
- Non-institutional investors (NIIs): 49% subscribed.
- Employee portion: 3.10 times subscribed.
- Qualified institutional bidders (QIBs): 63% subscribed.
The IPO, which concludes today, garnered muted interest early on, impacting the grey market premium (GMP), which dropped to ₹0.30 per share—indicating a flat listing. This is a decline from the earlier GMP of ₹3 before the bidding began.
Business Overview and Financials
Sagility India, formerly Berkmeer India, specializes in healthcare services, primarily supporting U.S. healthcare payers (insurers) and providers (hospitals, physicians, etc.). The company reported a net profit of ₹22.29 crore on revenue of ₹1,257.76 crore for the quarter ending June 30, 2024. For FY24, the company’s revenue was ₹4,781.5 crore, with a net profit of ₹228.27 crore, and it is expected to command a market cap of ₹14,044 crore.
Analyst Views and Recommendations
Brokerages, including Nirmal Bang Securities and Master Capital Services, remain cautiously optimistic, suggesting a long-term hold on the stock due to Sagility’s strong market position and experience in healthcare tech solutions. However, they note potential risks from the company’s heavy reliance on the U.S. market and the 100% OFS structure.
IPO Structure and Anchor Investments
Sagility raised ₹945.4 crore from 52 anchor investors prior to the IPO launch. The IPO reserved 75% for QIBs, 15% for NIIs, and 10% for retail investors.
With ICICI Securities, Jefferies India, IIFL Securities, and JP Morgan India as lead managers, Sagility India’s shares are set to debut on the BSE and NSE on November 12.
