The Hyderabad-based pharmaceutical formulations company is raising Rs 408.8 crore. Issue closes March 27.
Sai Parenteral’s Limited, a Hyderabad-based diversified pharmaceutical formulations company, is currently open for subscription with its IPO closing on March 27.
The company operates across two business lines — Branded Generic Formulations sold to government agencies, hospitals, and distributors in India and export markets, and a Contract Development and Manufacturing Organisation business serving domestic and international pharma companies.
Its product portfolio covers injectables, tablets, capsules, liquid orals, and ointments across therapeutic areas including cardiovascular, neuropsychiatry, and anti-diabetic. SBI Securities, which has reviewed the issue, recommends subscribing for a long-term investment horizon.
Issue Details
| Particulars | Details |
|---|---|
| Issue Opens | March 24, 2026 |
| Issue Closes | March 27, 2026 |
| Price Band | Rs 372 – Rs 392 per share |
| Issue Size | Rs 408.8 crore (at upper band) |
| Fresh Issue | Rs 285.0 crore |
| Offer for Sale | Rs 123.8 crore |
| Total Shares | 1,04,28,288 shares |
| Face Value | Rs 5 per share |
| Bid Lot | 110 shares and multiples thereof |
| Minimum Investment (Retail) | Rs 43,120 at upper band |
| Post-Issue Market Cap | Rs 1,732 crore (at upper band) |
| QIB / NII / Retail Split | 50% / 15% / 35% |
| BRLM | Arihant Capital Markets Ltd |
| Registrar | Bigshare Services Pvt Ltd |
Promoter shareholding declines from 61.2% pre-issue to 51.2% post-issue, with public float rising to 48.8%.
Objects of the Issue
| Object | Amount (Rs crore) |
|---|---|
| Capacity expansion and upgradation of manufacturing facilities | 110.8 |
| Establishment of new R&D Centre at Unit IV, Telangana | 18.0 |
| Repayment of outstanding borrowings | 14.3 |
| Working capital requirements | 33.0 |
| Repayment of bridge and term loan for Noumed acquisition | 35.6 |
| General corporate purposes | Balance |
| Total Fresh Issue | 285.0 |
What the Company Does
Sai Parenteral’s operates five manufacturing facilities — four in Hyderabad, Telangana and one in Ongole, Andhra Pradesh — with a total installed capacity of 1,160 million units per year on a single shift basis. The facilities carry certifications including WHO-GMP, TGA-Australia, and PICS, making them eligible for regulated market exports.
The company started its export business in FY23 and now exports to Australia, New Zealand, Southeast Asia, the Middle East, and Africa. As of March 2026, it has 55 dossiers developed in-house, of which 45 are approved by the FDA of the Philippines, and another 14 dossiers have been transferred by third-party CDMO customers. The CDMO business — contributing 28% of revenue in H1 FY26 compared to just 5.5% in FY23 — is the faster-growing segment and the strategic direction of the company. CDMO work involves design and development of new pharmaceutical products, validation batches, dossier compilation, regulatory filings, and commercial manufacturing.
The most significant recent development is the acquisition of a 74.6% controlling stake in Noumed Pharmaceuticals Pty Ltd, an Australia-based company that supplies OTC pharmaceutical products to retail pharmacy chains in Australia and New Zealand.
Through this acquisition, Sai Parenteral’s has gained access to Noumed’s 451 dossiers, which materially strengthens the CDMO pipeline. Noumed’s first manufacturing facility in Adelaide, South Australia — designed to produce oral liquids, nasal sprays, creams, ointments, tablets, and capsules — is expected to be operational by Q4 CY26 with TGA certification. The company plans to file 60 new product dossiers across regulated and semi-regulated markets by FY28.
Financials
| Particulars (Rs crore) | FY23 | FY24 | FY25 | H1 FY26 |
|---|---|---|---|---|
| Revenue from Operations | 97 | 154 | 163 | 87 |
| EBITDA | 18 | 32 | 39 | 16 |
| EBITDA Margin | 18.2% | 20.6% | 24.1% | 18.6% |
| PAT | 4 | 8 | 14 | 8 |
| PAT Margin | 4.5% | 5.5% | 8.9% | 8.9% |
| EPS (Rs) | 1.2 | 2.3 | 3.9 | 2.1 |
| RoE | 13.9% | 11.3% | 15.4% | — |
| RoCE | 12.1% | 12.2% | 17.0% | — |
The standalone financials show a small but consistently growing business — revenue has grown from Rs 97 crore in FY23 to Rs 163 crore in FY25, with EBITDA margins expanding from 18.2% to 24.1% over the same period. PAT margins have also improved steadily, reaching 8.9% in both FY25 and H1 FY26. However, the company has had negative operating cash flows in FY23, FY24, and H1 FY26 due to a high cash conversion cycle driven by large trade receivables and inventory build-up.
The FY25 cash conversion cycle stood at approximately 311 days on a standalone basis. On a proforma consolidated basis including Noumed, the revenue picture is substantially different — Rs 495 crore in FY25 and Rs 303 crore in H1 FY26 — though EBITDA margins compress to 8.4% and 10.7% respectively as Noumed is a distribution business with lower margins.
Valuation and Peer Comparison
| Company | Revenue FY25 (Rs cr) | EBITDA Margin | PAT Margin | P/E | EV/EBITDA | RoE |
|---|---|---|---|---|---|---|
| Sai Parenteral’s (standalone) | 163 | 24.1% | 8.8% | 120x* | 39.1x | 15.4% |
| Sai Parenteral’s (proforma) | 495 | 8.4% | 4.0% | 88.2x* | 46.3x | 17.6% |
| Sai Life Sciences | 1,695 | 24.2% | 10.1% | 125.3x | 51.5x | 8.0% |
| Innova Captab | 1,244 | 15.0% | 10.3% | 30.2x | 22.2x | 13.3% |
| Senores Pharma | 398 | 22.6% | 14.8% | 57.4x | 36.7x | 7.5% |
| Gland Pharma | 5,616 | 22.6% | 12.4% | 37.6x | 18.9x | 7.6% |
*post-issue capital at upper price band
At the upper band of Rs 392, the issue is priced at a P/E of 88.2x and EV/EBITDA of 46.3x on proforma FY25 earnings — a premium to most listed peers. SBI Securities acknowledges this, noting the valuation “appears to be at premium to its peers” but argues that Noumed’s 451 dossiers offer significant long-term growth opportunity for the CDMO business, particularly in the OTC segment across regulated markets.
Risks to Consider
Valuation is demanding. At 88–120x earnings depending on the basis used, the stock is priced for strong execution on growth plans that are still largely ahead of it. Any delay or disappointment will be punished. Negative operating cash flows. The company generated negative operating cash flows in FY23, FY24, and H1 FY26 due to a very high cash conversion cycle. Working capital management is a structural challenge. Noumed integration risk. The acquisition of Noumed is recent, and Noumed’s manufacturing facility in Adelaide is yet to be commissioned. Integration and execution risks are real and unproven. Customer concentration. The top five clients in Branded Generic Formulations contributed 52.7% of revenue in H1 FY26. Loss of any key client would have an outsized impact.