Sudeep Pharma IPO Opens — Should You Subscribe? Read Anand Rathi's Report For Key Issue Details

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Anand Rathi Report

Sudeep Pharma Ltd. launched its initial public offering today, November 21 and the offer closes for subscription on Nov. 25. The manufacturer of pharmaceutical excipients, food-grade minerals and specialty mineral ingredients has set the price band for the issue at Rs 563-593 per equity share.

Investors can place bids starting from a minimum of 25 shares and in multiples thereafter, meaning a minimum investment of Rs 14,825, based on the upper limit of the issue price band of Rs 593 per share.

The Rs 895.0-crore IPO comprises a fresh issue of 16 lakh shares, aggregating Rs 95 crore, along with an offer-for-sale component of 1.35 crore shares, amounting to Rs 800 crore.

ICICI Securities Ltd. and IIFL Capital Services Ltd. are the book-running lead managers for the issue while MUFG Intime India Pvt. will be the registrar of the issue.

Objects of the fresh Issue:

1. Capital Expenditure towards procurement of machinery for production line Located at Nandesari facility.

2. General corporate purposes

Competitive Strengths:

• Market leadership with a diversified product portfolio in a high barrier industry.

• Distinguished global customer base with long-standing relationships with key customers.

• Well-equipped and regulatory compliant Manufacturing Facilities.

• Strong research and development capabilities.

Key Strategies:

• Expand into high-growth businesses.

• Expand market reach through multiple growth initiatives.

• Develop customized solutions and enter into strategic partnerships to drive growth.

• Integrate recently acquired entities and continue evaluating inorganic growth opportunities.

• Enhance manufacturing capabilities.

Valuation & Outlook:

Sudeep Pharma, founded in 1989 and headquartered in Vadodara, is a leading manufacturer of pharmaceutical excipients and specialty mineral ingredients used across pharma, food, and nutrition industries.

The company operates three manufacturing facilities in Gujarat with a combined annual capacity of over 65,000 MT and holds multiple global quality certifications including USFDA (AIR), WHO-GMP, EXCiPACT, ISO 9001:2015, Halal, and Kosher.

They serve major names such as Pfizer, Merck, Danone, Aurobindo, and Intas, supported by subsidiaries in the US and Europe and the acquisition of Ireland-based Nutrition Supplies Services to strengthen its nutrition premix capabilities.

They hold a strong market position in a high-barrier industry and are among the top producers of pharmaceutical, food, nutrition, and specialty ingredients, with a key focus on mineral-based products and iron phosphate.

Their expansive global customer network includes companies in the pharmaceuticals, food and nutrition, and FMCG sectors. As of June 30, 2025, they have served over 1,100 customers across multiple regions, including partnerships spanning several decades.

At the upper price band, the company is valued at 48.3x FY25 P/E, translating to a post-issue market cap of Rs 66,979 million. They have also created a wholly owned subsidiary, SAMPL, to leverage their mineral chemistry capabilities in advanced materials, including a new facility for pCAM production beginning with battery-grade iron phosphate for LFP batteries in EVs and energy storage.

Additionally, the company aims to strengthen its presence in regulated markets such as the US and Europe by capitalizing on U.S. FDA-approved facilities, boosting exports, and transitioning to direct market access supported by local warehousing and sales teams.

Given these factors, the IPO appears fully priced, and we assign a “Subscribe – Long Term” rating.

Key Risk:

• They generate a significant portion of their revenues from a limited number of customers and the loss of such customers or a decline in demand from such customers could adversely affect their business, results of operations, financial condition, and cash flows.

• The manufacturing Facilities are subject to periodic inspections and audits by regulatory authorities and customers, and any manufacturing or quality control problems may subject them to regulatory action, damage the reputation and have an adverse effect on their business and results of operations.

• They are subject to extensive regulation from governmental and international authorities and if they fail to obtain, maintain or renew their statutory and regulatory licenses, permits and approvals required to operate, there business and results of operations may be adversely affected. Further, noncompliance with and changes in environmental, health and safety, and labor laws and other applicable regulations may adversely affect the business and results of operations.

• They are unable to trace certain historical corporate filings with respect to certain corporate records and secretarial forms filled by them with the Registrar of Companies. They cannot assure that no legal proceedings or regulatory actions will be initiated against them in the future in relation to such matters, which may adversely impact the financial condition and reputation.

• The RAHG Entities, who are deemed to be the Group Companies under the SEBI ICDR Regulations have not provided their consent to be identified as Group Companies and have not provided any information in respect of themselves. They cannot assure the complete disclosures are included in respect of such Group Companies in this Red Herring Prospectus.

• The business requires working capital and any failure in arranging adequate working capital for the operations may have an adverse effect on the business, results of operations, financial condition and cash flows.

• Their inability to accurately forecast demand for the products and manage inventory may have an adverse effect on the business, results of operations, financial condition and cash flows.

• The pharmaceutical industry in which they operate is highly competitive. If they cannot respond adequately to the competition they expect to face, they will lose market share and the profits will decline, which will adversely affect their business, financial condition and results of operations.

Click on the attachment to read the full IPO report:

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