Sagility India, a healthcare business process outsourcing provider, is all set to launch its IPO on November 5, 2024, with plans to raise approximately ₹2,106.6 crore. With a price band set between ₹28 and ₹30 per share, Sagility’s IPO aims to capitalize on the growing demand for healthcare support services, especially from U.S.-based clients. Here’s a closer look at key details, investor recommendations, and the potential share performance.
Key IPO Details and Financials
| Feature | Details |
|---|---|
| IPO Opening Date | November 5, 2024 |
| IPO Closing Date | November 7, 2024 |
| Price Band | ₹28 – ₹30 per share |
| Total Issue Size | 70.2 crore shares (100% OFS) |
| Reserved for Employees | 19 lakh shares (₹2 discount/share) |
| Listing Exchanges | NSE, BSE |
| Market Capitalization (Est.) | ₹14,044 crore |
Sagility India’s revenue has shown consistent growth, with income rising from ₹944 crore in FY22 to over ₹4,781 crore in FY24. For Q1 FY25, it reported a profit of ₹22.29 crore on revenue of ₹1,247.76 crore, with a net profit trend that’s steadily improving due to increasing service demand in the healthcare sector.
IPO Highlights: Should You Invest?
1. Business Strength and Client Base
Sagility provides critical outsourcing services to healthcare providers, payers, and pharmacy benefit managers (PBMs) in the U.S., leveraging its global centers in India, the Philippines, the U.S., and Colombia. Known for its cost-effective solutions, it supports top U.S. payers and has received high ratings from industry analysts for its operations and service quality.
2. Financial Performance and Valuation
Sagility’s earnings per share (EPS) and return on net worth (RoNW) are modest, but it aims to improve post-IPO. The offer is priced at a P/E of 15, which positions it attractively compared to similar BPO firms. However, with an OFS structure, IPO proceeds will not go directly to the company but benefit existing shareholders, raising some debate among investors regarding valuation justification.
GMP and Investor Sentiment
As of today, the Grey Market Premium (GMP) for Sagility India’s IPO stands at ₹2 per share, reflecting modest demand. Investor sentiment suggests cautious optimism, driven by Sagility’s consistent revenue growth but balanced by concerns over its profitability margins. Analysts suggest evaluating this IPO if looking for long-term exposure to the healthcare outsourcing market.
Pros
- Strong position in a growth market
- Established client base in the U.S.
- Strategic expansion with global delivery centers
Cons
- Moderate profitability ratios
- No capital inflow from IPO due to OFS structure
For more insights on Sagility India’s IPO and to assess if it aligns with your portfolio, visit our detailed IPO review page on Surajgoswami.com.
