SUDEEP PHARMA LIMITED IPO Explain

Sudeep Pharma IPO Overview

Vadodara-based pharma excipients leader raising ₹895 cr (₹95 cr fresh + ₹800 cr OFS). Price: ₹563-593. Lot: 25 shares (₹14,825 min). Funds for Nandesari machinery (₹75.81 cr).

Listing: BSE/NSE Nov 28. Lead: ICICI, IIFL. 89% OFS = promoter exit. Competes with Merck, Signet.

IPO DETAILED INFORMATION

Issue Details

Parameter	Details
IPO Type	Mainboard
IPO Open Date	21 November 2025 (Thursday)
IPO Close Date	25 November 2025 (Monday)
Anchor Investor Bidding	20 November 2025 (Wednesday) – Raised ₹268.5 cr from anchors (SBI MF, HDFC MF, ICICI Prudential, Nippon, WhiteOak, Aditya Birla, Motilal Oswal, Bandhan)
Allotment Date	26 November 2025 (Wednesday) – Expected
Credit to Demat	27 November 2025 (Thursday) – Expected
Refund Initiation	27 November 2025 (Thursday) – Expected
Listing Date	28 November 2025 (Friday) – Tentative
Price Band	₹563 – ₹593 per share
Face Value	₹1 per share
Lot Size	25 shares
Min Investment (Retail)	₹14,825 (1 lot of 25 shares at upper band)
Issue Size	₹895 crore total
Fresh Issue	₹95 crore (10.6%) – 16,02,024 shares
Offer for Sale (OFS)	₹800 crore (89.4%) – 1,34,90,726 shares by promoters
Total Shares Offered	1,50,92,750 equity shares
Listing	BSE & NSE (Mainboard)
Post-Issue Market Cap	~₹6,700 crore (at upper price band ₹593)
P/E Ratio	~48x (FY25 basis)
EPS	₹12.35 (FY25 basis)
ROE	25.23% (FY25), 17.84% (FY24)
ROCE	23.73% (FY25)
Debt	0.20x (very low leverage)

Issue Break-up

Category	Allocation
QIB (Qualified Institutional Buyers)	50% of Net Offer
NII (Non-Institutional Investors)	15% of Net Offer
Retail Individual Investors	35% of Net Offer (normal allocation)

Selling Shareholders (OFS ₹800 crore)

Promoters Selling 1,34,90,726 shares:

1. Sujit Jaysukh Bhayani – Promoter
2. Avani Sujit Bhayani – Promoter
3. Shanil Sujit Bhayani – Promoter
4. Sujeet Jaysukh Bhayani HUF – Promoter
5. Riva Resources Private Limited – Promoter entity
6. Bhayani Family Trust – Promoter entity

Note: OFS represents 89.4% of total issue – extremely high. Only 10.6% (₹95 cr) fresh capital to company vs 89.4% (₹800 cr) to promoter exit.

Objects of the Issue (Fund Utilization)

Fresh Issue Proceeds (₹95 crore) will be used for:

1. Capital Expenditure – Procurement of Machinery at Nandesari Facility I – ₹75.81 crore (79.8%)
   • Enhancing manufacturing capabilities
   • Capacity expansion for specialty ingredients
2. General Corporate Purposes – Balance amount (~20.2% or ₹19.19 crore)
   • Working capital, strategic initiatives

Strategic Focus:

• Expand production capacity for high-margin specialty products
• Modernize manufacturing infrastructure
• Support global demand growth

OFS Proceeds (₹800 crore):

• Goes entirely to Bhayani family promoters
• Company receives zero funds from OFS

Note: OFS dominates (89.4%) – signals major promoter exit rather than growth capital infusion.

Lead Managers & Registrar

Book Running Lead Managers (BRLMs):

• ICICI Securities Limited
• IIFL Capital Services Limited

Registrar:

• MUFG Intime India Private Limited (Link Intime India Private Limited)
• Phone: +91-22-4918 6270
• Website: https://in.mpms.mufg.com/Initial_Offer/public-issues.html

Promoters & Management

Key Promoters – Bhayani Family:

1. Sujit Jaysukh Bhayani (Partial OFS participant)
2. Avani Sujit Bhayani (Partial OFS participant)
3. Shanil Sujit Bhayani (Partial OFS participant)
4. Sujeet Jaysukh Bhayani HUF
5. Riva Resources Private Limited
6. Bhayani Family Trust

Company History:

• 1989: Founded in Vadodara, Gujarat
• 36 years: Building mineral-based excipients expertise
• 2025: Positioning for mainboard listing

Company Contact:

• Registered Office: Vadodara, Gujarat
• Phone: TBD
• Email: TBD
• Website: www.sudeeppharma.com

COMPANY OVERVIEW

Establishment & Background:

• Founded in 1989 (36 years of operations)
• Industry: Pharmaceutical Excipients & Specialty Ingredients Manufacturing
• Headquarters: Vadodara, Gujarat
• Technology-driven manufacturer of mineral-based pharmaceutical, food, and nutrition ingredients
• Serves global pharmaceutical, food, and nutrition industries

Business Model:

• Integrated manufacturer of excipients and specialty ingredients for pharma, food, nutrition sectors
• Product Portfolio (200+ products):
  1. Pharmaceutical, Food & Nutrition: Mineral salts (calcium, zinc, iron, potassium, magnesium, sodium, copper)
  2. Specialty Ingredients: Micronutrient premixes, encapsulated ingredients, granulated minerals, triturated blends
• In-house Technologies: Encapsulation, spray drying, granulation, trituration, liposomal preparations, mixing
• Revenue Model: B2B sales to pharmaceutical companies, food manufacturers, nutrition brands
• Value Proposition: High-quality, technology-driven manufacturing with global certifications

Market Position:

• World’s largest producer of food-grade iron phosphate for infant nutrition, clinical nutrition, F&B (by production capacity)
• Key exporter of mineral ingredients – among India’s largest exporters in 2024
• Serving 1,100+ clients in 100 countries including 14 Fortune 500 companies
• Marquee clients: Pfizer, Mankind Pharma, Merck Group, Aurobindo Pharma, Cadila, IMCD Asia, Danone

Operations:

• 4 manufacturing facilities:
  • 3 units in Gujarat (Nandesari): 65,579 MT capacity – food-grade and pharma minerals, specialty ingredients
  • 1 unit in Ireland (NSS acquisition): International presence
  • Combined capacity: 72,246 MT annually as of June 2025
• 12 production lines across facilities
• 100+ products as of June 2025 (evolved from pure excipients to diversified ingredients)
• Geographic revenue: Exports to 100 countries
• Customer stickiness: 83.17% revenue from repeat customers (FY25)

Company Strengths

1. World’s Largest Food-Grade Iron Phosphate Producer – Niche Leadership:
   • Global #1 in food-grade iron phosphate for infant formula, clinical nutrition, F&B by production capacity
   • Niche specialization creates pricing power and high barriers to entry
   • Critical ingredient for baby food/nutrition – sticky, quality-sensitive market
   • India’s key exporter of mineral ingredients (2024)
2. Diversified Global Blue-Chip Customer Base – 1,100+ Clients, 14 Fortune 500:
   • Serving 1,100+ clients across 100 countries
   • 14 Fortune 500 clients: Pfizer, Merck, Danone provide validation and stickiness
   • 83.17% repeat customer revenue (FY25) – strong retention
   • Diversified across pharma, food, nutrition reduces concentration risk
3. Strong Financial Profile – ROE 25.23%, Near Debt-Free (0.20x):
   • FY25: ₹511 cr revenue (+10%), ₹139 cr PAT (+4%)
   • ROE of 25.23% (FY25 vs 17.84% FY24) – exceptional capital efficiency
   • ROCE 23.73% – strong returns on capital employed
   • Low debt (D/E 0.20x) – healthy balance sheet
   • Reserves: ₹668 crore – strong equity cushion
4. Technology-Driven Manufacturing & In-House Capabilities:
   • Proprietary technologies: Encapsulation, spray drying, granulation, trituration, liposomal prep, mixing
   • Vertical integration ensures quality control and cost efficiency
   • Global certifications enabling access to regulated markets (USA, Europe)
   • 200+ products demonstrating R&D and innovation capabilities
5. Capacity Expansion Runway – 72,246 MT with IPO-Funded Growth:
   • Current capacity: 72,246 MT (65,579 MT Gujarat + Ireland unit)
   • ₹75.81 cr IPO proceeds for Nandesari machinery expansion
   • Scalability to meet growing global demand for pharma/nutrition ingredients
   • 12 production lines providing manufacturing flexibility
6. Industry Tailwinds – Pharma Excipients & Nutraceuticals Boom:
   • Global pharma excipients market growing driven by generics, biologics
   • Infant nutrition and food fortification gaining traction (iron deficiency, malnutrition focus)
   • India’s “Pharma of the World” positioning benefiting ingredient suppliers
   • Specialty ingredients commanding premium margins vs commodity chemicals
7. Strong GMP & Positive Pre-IPO Sentiment:
   • GMP ₹115-130 (19-22% premium) – strong investor interest
   • Anchor raised ₹268.5 cr from marquee mutual funds (SBI, HDFC, ICICI, Nippon, WhiteOak)
   • Positive market sentiment and listing pop potential

Key Risks & Challenges

1. Massive OFS (89.4%) – Promoter Exit Signal, Minimal Fresh Capital:
   • ₹800 cr (89.4%) OFS to promoters vs ₹95 cr (10.6%) fresh capital – extremely high
   • Bhayani family cashing out significant stake
   • Signals potential valuation peak or promoter confidence concerns
   • Limited fresh capital (₹95 cr) for growth initiatives
   • Company doesn’t benefit from majority of IPO proceeds
2. Premium Valuation – P/E 48x vs Industry Peers:
   • P/E of 48x (FY25 basis) – premium vs some specialty chemical peers
   • Market cap ₹6,700 cr for ₹139 cr PAT – aggressive pricing
   • Valuation justified only if growth accelerates significantly
   • Limited margin of safety – any disappointment triggers correction
   • Post-issue P/E based on Q1 FY26 annualized could be even higher
3. Modest Revenue Growth (10% YoY) – Slow Top-Line Momentum:
   • FY25 revenue grew just 10% (₹465 cr to ₹511 cr)
   • PAT growth even lower at 4% (₹133 cr to ₹139 cr)
   • Growth rates not commensurate with premium valuations
   • Capacity utilization and volume growth need monitoring
   • Nearly 100% profit jump FY23-FY24 followed by deceleration to 4%
4. Raw Material Price Volatility & Commodity Risk:
   • Dependent on mineral raw materials (iron, calcium, zinc, magnesium) – subject to global commodity price swings
   • Input cost inflation compresses margins if unable to pass through
   • Metal prices (iron ore, zinc, copper) cyclical and volatile
   • Forex risk if raw materials imported (INR-USD fluctuations)
5. Regulatory & Quality Compliance Burden:
   • Pharma and food-grade ingredients heavily regulated (USFDA, EUGMP, FSSAI)
   • Any quality failures, contamination, or non-compliance catastrophic
   • Product recalls, fines, client terminations possible
   • Continuous investment in quality systems and certifications required
   • 100-country operations multiply regulatory complexity
6. Competition from Global & Domestic Players:
   • Competes with global excipient leaders: Merck, Signet Chemical, Finar, Loba Chemie
   • Large pharma companies backward integrating into excipients
   • Chinese manufacturers offering cost competition
   • Commoditization risk in standard mineral salts
   • Need for continuous differentiation through specialty products
7. Geographic & Client Concentration (Potential):
   • While 1,100 clients diversified, concentration among top 10-20 likely high (pharma ingredient supplier pattern)
   • Export-heavy model exposes to global economic downturns, trade policy changes
   • Fortune 500 clients provide stability but also negotiating leverage
   • Financial disclosures on customer/geographic concentration pending RHP review

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Disclaimer: This information is based on publicly available sources including SEBI RHP filings and company disclosures. Investors should conduct their own research and consult with financial advisors before making investment decisions. Past performance is not indicative of future results. The company has massive OFS (89.4% vs 10.6% fresh), premium valuation (P/E 48x), and modest revenue growth (10% YoY). Grey Market Premium of ₹115-130 (19-22% expected listing gain) is unofficial and volatile.