Sagility IPO India, a healthcare-focused services provider based in Bengaluru, is making headlines with its Initial Public Offering (IPO) that opened on November 5, 2024. This IPO is a significant event in the Indian financial market, as it aims to raise ₹2,106.60 crore through an offer-for-sale of 70.22 crore equity shares. With the price band set between ₹28 and ₹30 per share, the IPO has garnered considerable attention from both institutional and retail investors.
Overview of Sagility IPO India
Formerly known as Berkmeer India, Sagility India specializes in providing technology-led services to the US healthcare sector. The company primarily serves two types of clients: payers, which are US health insurance companies that finance and reimburse healthcare costs, and providers, including hospitals, physicians, and medical technology firms. This dual focus allows Sagility to support the core operations of its clients effectively.
The company has established a solid reputation in the US market, boasting an average client tenure of 17 years for its five largest customer groups as of March 31, 2024. Notably, Sagility has recently expanded its client base by acquiring 20 new customers over the past two fiscal years.
Sagility IPO Details
The IPO’s subscription period runs from November 5 to November 7, 2024. Investors can apply for a minimum of 500 equity shares, which translates to an initial investment of approximately ₹14,000 at the upper price band. The company has allocated 75% of the issue for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and 10% for retail investors.
One unique aspect of this IPO is that it does not involve any fresh issue of shares; all proceeds will go directly to the selling shareholders, namely Sagility BV, the Netherlands-based promoter. This structure means that Sagility India itself will not receive any funds from the IPO.
Anchor Investor Participation
Ahead of its public offering, Sagility India successfully mobilized ₹945.4 crore from 52 anchor investors on November 4, 2024. This strong backing includes notable global institutional investors such as Nomura Funds, Government Pension Fund Global, and Goldman Sachs. Domestic investment houses like ICICI Prudential Mutual Fund and HDFC Mutual Fund also participated in this anchor book.
The allocation to these anchor investors was finalized at ₹30 per share, reflecting confidence in Sagility’s business model and growth prospects.
Sagility IPO Market Sentiment and Grey Market Premium (GMP)
As with any IPO, market sentiment plays a crucial role in determining investor interest. Initially, before the launch, the grey market premium (GMP) for Sagility India shares was reported at ₹3. However, as of today, the GMP has dropped to ₹0, indicating neutral investor demand at this stage. This fluctuation could suggest varying levels of enthusiasm among potential investors.
Subscription Status of Sagility IPO
On the first day of bidding, subscription levels indicated moderate interest. Retail investors showed a stronger appetite for shares compared to non-institutional investors. By early reports, retail subscriptions reached about 24% of their quota while overall subscriptions stood at approximately 5%.
Financial Performance
Sagility India’s financial health is noteworthy. For the quarter ending June 30, 2024, the company reported a net profit of ₹22.29 crore on revenues of ₹1,257.76 crore. For the fiscal year ending March 31, 2024 (FY24), it achieved a net profit of ₹228.27 crore with total revenues amounting to ₹4,781.5 crore.
Analysts are optimistic about Sagility’s growth potential within the US healthcare market due to increasing healthcare spending and a robust demand for technology-driven solutions.
Analyst Recommendations
Brokerage firms have begun weighing in on whether investors should subscribe to this IPO. Marwadi Financial Services has assigned a “subscribe” rating based on Sagility’s leadership position in the resilient US payer and provider solutions market. Other firms like StoxBox and Master Capital also recommend subscribing due to Sagility’s established client relationships and consistent financial performance.
Long-Term Growth Potential
Investors considering participation in this IPO should focus on Sagility’s long-term growth potential rather than short-term gains. The company’s established presence in a growing sector positions it well for future expansion as healthcare needs evolve.
The Sagility India IPO marks an important milestone for both the company and potential investors looking to tap into the lucrative US healthcare market through Indian equities. With strong backing from institutional investors and an established business model focused on technology-led services for payers and providers alike, Sagility presents an intriguing opportunity for those interested in long-term investments in this sector.
As with any investment decision, prospective shareholders should conduct thorough research and consider their risk tolerance before participating in this IPO. With its competitive pricing strategy and significant institutional interest already demonstrated through anchor investments, Sagility India is poised to make a notable entry into India’s public markets.