Sai Parenteral's

• Sai Parenteral's is coming out with a 100% book building; initial public offering (IPO) of 1,08,19,170 shares of face value Rs 5 each in a price band Rs 372-392 per equity share. 
• Not more than 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 35% for the retail investors.
• The issue will open for subscription on March 24, 2026 and will close on March 27, 2026.
• The shares will be listed on BSE as well as NSE.
• The face value of the share is Rs 5 and is priced 74.40 times of its face value on the lower side and 78.40 times on the higher side.
• Book running lead manager to the issue is Arihant Capital Markets.
• Compliance Officer for the issue is Shivali Aggarwal.

Profile of the company

The company is a diversified pharmaceutical formulations company with capabilities in research, development and manufacturing. It is in the business of (i) Branded Generic Formulations and (ii) Contract Development and Manufacturing Organisation (CDMO) products and services for the domestic and international markets. The company’s portfolio includes formulation products across various therapeutic areas like cardiovascular, neuropsychiatry, anti-diabetic, respiratory health, antibiotics, gastroenterology, vitamins, minerals and supplements (VMS), analgesics, and dermatology with offerings across dosage forms such as injectables, tablets, capsules, liquid orals and ointments. In the injectables segment, it has capabilities in sterile manufacturing for critical care and antibiotics, which are delivered through dry powder injections, pre-filled syringes, ampoules, and vials.

Branded Generic Formulations are those off-patent pharmaceutical products that are produced and sold by the company under its own brand names. it manufactures and sells Branded Generic Formulations to a diverse customer base, including central and state government agencies, pharmaceutical companies, public and private hospitals and super stockists in the domestic market. It started its export business in Fiscal 2023 after acquiring two internationally accredited manufacturing units in Hyderabad, Telangana. It exports its products to the Regulated and Semi-Regulated Markets of Australia, New Zealand, Southeast Asia, Middle East and Africa through distributors.

The company’s CDMO business includes product development, which involves designing and developing new pharmaceutical products, validation batches i.e. trial runs conducted to ensure consistent manufacturing quality, stability studies, which assess drug performance under various conditions, dossier compilation, which involves preparing and compiling documents required for product approvals, international regulatory filings which involves submission to regulatory authorities in a particular jurisdiction to register or sell a drug/medicine and commercial manufacturing.

Proceed is being used for:

• Capacity expansion and upgradation of manufacturing facilities
• Establishment of a new R&D Centre
• Repayment / prepayment of certain outstanding borrowings
• Working capital requirements
• Repayment of bridge loan and term loan availed for investment in wholly owned subsidiary, Sai Parenterals Pte (Singapore), in relation to the acquisition of Noumed Pharmaceuticals Pty (Australia)
• General corporate purposes

Industry overview

The Indian pharmaceutical industry is the world’s third largest by volume and was estimated at $62 billion in 2025. It is expected to grow at a CAGR of 11.2% to reach $146 billion by 2033. The industry can be broadly classified into formulations and bulk drugs. Formulations can further be divided into domestic formulations and export formulations, both having almost an equal share in the market. At present, generic drugs constitute a large part of Indian exports. The pharmaceutical market in India is dominated by generics, which account for around 90% of drug consumption in the country in terms of value.

India has a large and increasing patient pool with a high disease burden of communicable and non-communicable diseases, thereby providing a large market for the sale of drugs. For example, India contributes 15% of the global burden for highly prevalent diseases (respiratory infections, cardiovascular, diabetes, cervical cancer). The primary drivers of chronic diseases are social shifts, rapid urbanisation, detrimental physical environments, and unhealthy lifestyles. India is expected to undergo rapid urbanisation, with nearly an additional 50 million people expected in urban areas between 2023 and 2027. A sizable working-age group, coupled with this swift urbanisation process, contributes to a sedentary lifestyle, consequently elevating the risk of chronic diseases.

The Indian pharmaceutical sector benefits from policies such as the Production-Linked Incentive (PLI) scheme, which has an outlay of around Rs 2,300 crore in 2025-26 budget, aimed at enhancing the manufacturing ecosystem for essential drugs and boosting exports. In the budget 2025-26, the government allocated around Rs 1,460 crore to develop bulk drug parks, intending to reduce dependency on imports for critical APIs and intermediates. Additionally, the notification of the Revised Schedule M Guidelines by the Government of India on December 28, 2023, is set to bring Indian pharmaceutical regulations at par with global standards.

Pros and strengths

Diversified generic formulations player with an established track record: The company was incorporated in 2001 and initially focused on manufacturing parenteral (injectables) formulations, reporting annual revenue of around Rs 8.6 million by the time the current management assumed leadership in 2016. Since then, the company has undergone a steady expansion across business verticals, geographical markets, and customer segments and achieved revenue of operations of Rs 1,631.05 million in Fiscal 2025. This growth has been driven by operational efficiency and strategic diversification of product offerings and consistent focus on strengthening its market presence. The company has transitioned from manufacturer of parenteral formulations to a diversified formulations business with capabilities spanning across multiple dosage forms, including injectables, tablets, capsules, liquid orals and ointments.  

Strong focus on CDMO business: The company has commenced engagements with domestic CDMO customers in Fiscal 2022 and expanded its CDMO operations to international markets in Fiscal 2023, supported by the acquisition of two internationally accredited Manufacturing Facilities i.e. Unit III and IV which enabled its entry into the Regulated and Semi-Regulated Markets. These acquisitions not only expanded its product portfolio but also led to establishment of a dedicated FR&D facility enhancing its ability to deliver end-to-end development and technical services. The acquisition of Noumed will further strengthen its CDMO business, particularly in the OTC segment. As of December 31, 2025, it had active CDMO engagements with international and domestic pharmaceutical companies. Several of these relationships are supported by long-term supply contracts, reflecting the trust placed in its manufacturing and regulatory compliance capabilities.

Well-established distribution network in India and overseas: The company has an established presence in the institutional markets, supported by the experience of its promoters and its wholly owned subsidiary, Revat Laboratories. Its institutional business spans multiple Indian states, contributing to growing visibility and recognition within this segment. It participates in procurement tenders issued by central and state government agencies for the supply of both high-value and high-volume pharmaceutical formulations. It supplies to various state procurement agencies, as well as to multiple locations under the Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) and ESI hospitals across India.

Track record of value-accretive acquisitions: The company has adopted a targeted acquisition strategy to strengthen its manufacturing, technological, and CDMO capabilities and geographical presence in the Regulated Markets and Semi-Regulated Markets expand its manufacturing base. In Fiscal 2022 and Fiscal 2023, it completed two key asset acquisitions to expand its regulatory reach, facilitate faster dossier filings and shorten its time from R&D to commercialisation: TGA-Australia approved facility at IDA Bhongir, Telangana, accredited with PIC/S standards (Unit-III); and WHO-GMP certified unit at IDA Bollaram, Hyderabad, accredited with PIC/S standards (Unit-IV). Following these acquisitions, production at both these manufacturing facilities has shown robust growth, reflecting its ability to integrate acquired assets and match capacity with increasing demand in domestic and international markets.

Risks and concerns

Significant Dependence on injectables and tablets revenue: The company is a diversified pharmaceutical formulations company with capabilities in research, development, and manufacturing. It has been significantly dependent on its Injectables and Tablets product segments. Revenue from Injectables contributed 25.54%, 44.78%, 47.64%, and 92.03% during the six-month period ended September 30, 2025, Fiscal 2025, Fiscal 2024, and Fiscal 2023, respectively. Revenue from Tablets contributed 59.53%, 36.23%, 37.10%, and 3.52% during the six-month period ended September 30, 2025, Fiscal 2025, Fiscal 2024, and Fiscal 2023, respectively. Any reduction in demand for these key product segments may adversely affect its business, financial condition, results of operations, and cash flows.

Supplier concentration and raw material cost volatility: Majority of its key raw material purchases, being APIs, excipients and intermediates, are sourced from a diversified supplier base, and it does not enter into is not any long-term contractual agreements with them. Purchases from its top 10 suppliers amounted to 77.81%, 82.70%, 58.81%, and 73.04% of total raw material purchases during the six-month period ended September 30, 2025, Fiscal 2025, Fiscal 2024, and Fiscal 2023, respectively. Any reduction of supplies or discontinuation of supplies from its top suppliers could have a material adverse effect on its business, financial condition, results of operations and cash flows. Any fluctuation in prices of its raw materials may have a material adverse effect on its business, results of operations, prospects and financial condition.

Customer concentration risk in key business segments: Its business is dependent on the sale of products to a limited number of customers for a significant portion of its revenues. Revenue contribution from the Top 5 customers stood at 52.65%, 58.62%, 70.29%, and 56.60% for branded generic formulations, and 27.75%, 19.02%, 10.70%, and 4.75% for CDMO products and services during the six-month period ended September 30, 2025, Fiscal 2025, Fiscal 2024, and Fiscal 2023, respectively. If its top customers or a number of its top customers in any of its business verticals cease to purchase products from the company, its business, results of operations and financial condition could be adversely affected.

Dependence on government tenders and public health schemes: The company supplies both high-value and high-volume pharmaceutical formulations to central and state government agencies, pharmaceutical companies, public and private hospitals and super stockists in the domestic market. Its domestic Branded Generic Formulations business spans across India, contributing to growing brand visibility and recognition within this segment. It participates in procurement tenders issued by central and state government agencies for the supply of its products. It supplies to various state procurement agencies, including those of Andhra Pradesh, Telangana and Rajasthan, and to various locations under the Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) and ESI Hospitals across India. Any reduction in the budgetary allocation or support to public health schemes by the Central and/or the State Governments may have a significant impact on the price and volume of tenders and the supply requirements under these tenders that may be issued by government authorities/bodies resulting in slowdown or downturn in its business prospects.

Outlook

Sai Parenteral's, through its subsidiaries, carries out contract research and manufacturing activities for customers engaged in pharmaceutical industries. The company is in the business of (i) Branded Generic Formulations and (ii) CDMO products and services for the domestic and international markets. The company’s portfolio includes formulation products across various therapeutic areas like cardiovascular, neuropsychiatry, anti-diabetic, respiratory health, antibiotics, gastroenterology, VMS, analgesics, and dermatology with offerings across dosage forms such as injectables, tablets, capsules, liquid orals and ointments. On the concern side, the company success depends significantly on its ability to successfully commercialize its products under development in a timely manner. The development and commercialization process for new products is time-consuming, costly and involves a high degree of business risk. Due to the prolonged period of time for developing a new product, delays associated with regulatory approval process as well as competitive factors, it may invest resources in developing products that may not be successful commercially, which could have an adverse effect on its business, results of operations and financial condition.

The issue has been offering 1,08,19,170 shares in a price band of Rs 372-392 per equity share. The aggregate size of the offer is around Rs 402.47 crore to Rs 424.11 crore based on lower and upper price band respectively. Minimum application is to be made for 38 shares and in multiples thereon, thereafter. On performance front, its revenue from operations increased by 6.08% to Rs 1,631.06 million for Fiscal 2025 from Rs 1,537.61 million for Fiscal 2024. Its profit for the period increased by 71.76% to Rs 144.54 million in Fiscal 2025 from Rs 84.15 million in Fiscal 2024.

Meanwhile, its CDMO expansion strategy is centred on offering integrated, end-to-end services across the product lifecycle, covering formulations development, clinical and stability studies, regulatory submissions, validation batches and commercial manufacturing. These services are offered across a range of dosage forms and therapeutic areas and are aligned with customer requirements in both Regulated and Semi-Regulated Markets. To support this strategy and leverage the global CDMO opportunity, it aims to expand its customer base in the injectables segment by targeting Regulated and Semi-Regulated Markets. it also intends to add new customers and deepen existing relationships with its customers in the oral solid dosage forms. Investments in capacity enhancement, regulatory upgrades, and new product development will underpin these efforts.