SUPRIYA LIFESCIENCE LIMITED

Supriya Lifescience Limited is one of the key Indian manufacturers and suppliers of active pharmaceuticals ingredients ('APIs'), with a focus on research and development. As of October 31, 2021, the Company has produced 38 APIs, focused on diverse therapeutic segments such as antihistamine, analgesic, anaesthetic, vitamin, anti-asthmatic and anti - allergic. They have consistently been the largest exporter of Chlorpheniramine Maleate and Ketamine Hydrochloride from India, contributing to 45-50% and 60-65%, respectively, of the API exports from India, between Fiscal 2017 and 2021. The Company is also one of the largest exporters of Salbutamol Sulphate in India contributing to 31% of the API exports from India in FY 2021 in terms of Volume. Company's customers include global pharma companies such as Syntec Do Brasil LTDA, American International Chemical Inc and AT Planejamento E Desenvolvimento De Negocios Ltda and Suan Farma Inc, Acme Generics LLP, Akum Drugs Ltd and Mankind Pharma Ltd. Its products are approved by various international regulatory authorities such as USFDA, EU GMP, EDQM, SFDA NMPA, ANVISA, KFDA, PMDA, TGA and Taiwan FDA. As of March 31, 2021, the company have filed 11 active DMFs with USFDA and seven active CEPs with EDQM, for its API products in therapeutic areas such as antihistamine, analgesic, anaesthetic, vitamin, anti-asthmatic and anti-allergic. The company have a DSIR approved R&D facility in Parshuram Lote, Maharashtra. Its R&D efforts are primarily focused across the value chain of API process development. As on April 30, 2021, the company have a team of 16 scientists. Its R&D efforts are demonstrated by a strong pipeline of products such as Dextromethorphan Hydrobromide (decongestant), Pentoxifylline (xanthine derivatives), (S)-Ketamine Hydrochloride (analgesic/ antipyretic/ anaesthetic), Phenylephrine Hydrochloride (decongestant), Allopurinol (antigout) and Benfotiamine (diabetic neuropathy). As per financial performance, SLL has posted total income/net profits (loss) of Rs. 285.86 cr. / Rs. 39.40 cr. (FY19), Rs. 322.71 cr. / Rs. 73.40 cr. (FY20), Rs. 396.22 Cr. / Rs. 218.07 Cr. (FY21) and Rs. 230.06 Cr. / Rs. 65.95 Cr. (H1FY22). So company has posted consistent high growth, over last couple of years. Company has posted an average EPS of Rs. 12.70 and average RoNW of 46.43% for last three fiscals. Issue is priced at a P/BV of 5.99 as per NAV of 45.76 on 30.09.21. If we attribute latest earnings of FY21 on fully diluted equity post issue, then asking price is at a P/E of around 17.81 and if we annualise H1 FY22, then on fully diluted equity post issue P/E is 16.72 which looks fairly priced. As per RHP, Comparison between listed peers are shown in above table. On BRLM's front, two BRLMs are associated with this IPO, and have handled around 69 IPO in last three fiscals. From last 10 IPOs, 3 are opened below issue price and remaining are opened above issue on the day of listing. As of now, 4 are trading below and other are trading above issue price. ( As on 13.12.21) As per financials, Supriya Lifescience Limited has shown good growth, RoNW is 46.04% and P/E is respectively 18 and 17 as per FY21 and annualised FY22 earnings, which looks fairly priced. Company is in business of pharmaceutical API segment and its expected to grow at good rate, so there is good growth opportunities available. Performance of BRLM is average. So, we are giving SUBSCRIBE rating to this IPO for listing gains and long term.

• 1 Satish Waman Wagh