API manufacturer Supriya Lifescience's Rs 700-crore IPO reasonably priced

Growth prospects and scope for margin expansion are other triggers, say brokerages

Supriya Lifescience, a major manufacturer of active pharmaceutical ingredients (APIs) is raising Rs 700 crore from the primary market. While a majority of the equity raise is an offer for sale and will lead to promoter stake dilution, part of the funds will be used to fund capital expenditure and reduce debt.

Though the company has a basket of 38 APIs, its focus is on high-value products with limited competition. About three fourths of its revenues comes from exports with the company having a dominant position in some of the APIs. In the FY17-21 period, it was the largest exporter