Sagility India IPO opens today: GMP flat; should you park your money?

The initial public offering (IPO) of healthcare-focused solutions and services provide Sagility India opens for public subscription today. Sagility India announced that it has already raised Rs 945.40 crore from anchor investors, with bidding concluding on Monday, November 4, 2024.

 

Through the IPO, which is entirely an offer for sale (OFS), the promoter, Sagility BV, is offloading 702,199,262 shares with a face value of Rs 10 each. 

 

The Sagility India IPO is available at a price band of Rs 28-30 per share with a lot size of 500 shares. Accordingly, investors can bid for a minimum of 500 shares and in multiples thereof. A retail investor would need a minimum of Rs 15,000 to bid for one lot of Sagility India IPO shares.

 

Meanwhile, unlisted shares of Sagility India were trading flat in the grey market ahead of its opening for subscription, according to sources tracking grey market activity.

 

The subscription window to bid for the Sagility India IPO is expected to close on Thursday, November 7, 2024. Following that, the basis of allotment for Sagility India IPO shares is likely to be finalised on Friday, November 8, 2024. After allotment, Sagility India shares are expected to be credited to demat accounts on Monday, November 11, 2024.

 

Sagility India shares are set to make their market debut on Tuesday, November 12, 2024, by listing on both BSE and NSE.

 

Link Intime India is the registrar for the Sagility India IPO. ICICI Securities, IIFL Securities, Jefferies India, and JP Morgan India are the book-running lead managers for the public issue.

 

In its Red Herring Prospectus, Sagility India stated that the objectives of the offer are to (i) achieve the benefits of listing equity shares on the stock exchanges and (ii) carry out the offer for sale of up to 702,199,262 equity shares with a face value of Rs 10 each by the promoter selling shareholder.

 

Sagility India's total comprehensive income attributable to the company’s owners stood at Rs 240.46 crore in FY24, compared to Rs 376.44 crore in FY23 and Rs 35.49 crore in FY22.

 

Should you subscribe to the Sagility India IPO?

 

Master Capital Service: Subscribe for long-term

Master Capital Service recommends subscribing to the IPO for long-term gains. They highlight that US healthcare spending grew at a 3.2 percent CAGR from 2014 to 2023, reaching $201.1 billion in 2023, and is expected to rise at a 5.2 per cent CAGR, reaching $258.9 billion by 2028. The industry's complex regulations and compliance requirements present opportunities for specialised service providers like Sagility India, which has strong relationships across healthcare payers and providers.

 

Bajaj Broking: Subscribe for long-term

Bajaj Broking also recommends a long-term subscription, noting that Sagility India reported an average EPS of Rs 0.37 and RoNW of 2.52 percent over the past three fiscal years. While the IPO is priced at a P/BV of 1.85, they caution that it appears aggressively priced at a P/E of 157.89 based on FY25 earnings.  About Sagility India  Previously known as Berkmeer India, Sagility India provides technology-enabled business solutions and services to clients in the US healthcare industry. The company's services for healthcare providers include revenue cycle management functions such as financial clearance, medical coding, billing, and accounts receivable follow-up services. Sagility's customer base is exclusively in the USA. As of March 31, 2024, the company's five largest customer groups had an average service tenure of 17 years. In January 2024, Sagility served five of the ten largest payers in the US (source: Everest Report).