Sagility India IPO 2024: 10 Key Things You Must Know Before Investing

Sagility India Limited, a leading healthcare technology solutions provider, is set to launch its Initial Public Offering (IPO) on November 5th, 2024. The IPO aims to raise ₹2,106.60 crores through an offer-for-sale (OFS) of 70.22 crore shares by the promoter and offers an opportunity for investors to participate in the growth story of a company that is at the forefront of the healthcare technology revolution. 

Here are 10 key things to know before investing 

What are the IPO dates, price band and issue size?  

Here is the key information about the Sagility India IPO. 

What is the minimum investment for Sagility India IPO?  

The lot size of the IPO is 500 shares, which means you need to invest a minimum of ₹14,000 or 500 shares to invest in the IPO.  

What does the company do?  

Bengaluru-based Sagility India Limited specializes in delivering technology-driven business solutions and services tailored for the U.S. healthcare sector. Their focus is exclusively on healthcare clients, including payers like health insurers and providers such as hospitals, physicians, and medical device companies. Sagility’s services help payers with critical operations such as claims management, enrollment, and clinical functions. For providers, they offer support in revenue cycle management. Additionally, Sagility provides prescription management services to pharmacy benefit managers. 

With a global team across delivery centres in India, the Philippines, the U.S., Jamaica, and Colombia, they have been recognized as industry leaders by Avasant and Everest. Since its establishment in 2021, following the acquisition of its predecessor’s healthcare business, Sagility has expanded its client base, working with major U.S. health insurers and gained 22 new clients by mid-2024. 

What is the Sagility IPO objective, why is the company raising money?  

Since there is no fresh issue component to this public offer, the entire IPO proceeds will go to the selling shareholder. 

How much is the IPO reservation for retail and other investors?  

The company has set aside 75% of the issue for qualified institutional buyers (QIBs), 10% for retail investors and 15% for non-institutional investors. 

What are the key strengths and potential risks of investing in Sagility India IPO? 

 Key Strengths of Sagility India 

• Sagility India provides technology-driven services to payer and provider clients, offering end-to-end healthcare solutions across front- and back-office operations.  

• Their proprietary tools support client operations with advanced technologies like robotic process automation, analytics, and artificial intelligence. 

• In March 2024, Sagility India expanded its capabilities by acquiring BirchAl, a healthcare technology company specializing in cloud-based AI solutions. 

• Operating from 30 locations across the U.S., Colombia, Jamaica, India, and the Philippines.  

• Sagility India has seen consistent growth in revenue, increasing from Rs 923.41 crore in FY22 to Rs 4,753.56 crore in FY24. 

Potential Risks 

• Sagility India is mainly focused on the US healthcare industry, so any negative changes in this sector, reduced demand for services, or challenges in expansion could impact its performance. 

• In FY24, FY23, and FY22, the top 10 US customers contributed Rs 4,345.18 crore (91.41%), Rs 3,825.16 crore (90.68%), and Rs 849.07 crore (91.95%) to revenue. Losing any key client or struggling to maintain relationships could affect finances and operations. 

• The company, along with subsidiaries and directors, is involved in legal proceedings. Unfavorable judgments could impact business prospects. 

• Major assets include goodwill and intangible assets. Any impairment could affect reputation and financial health. 

• Sagility India must stay updated with technology. Lack of investment or disruptions could impact operations and stability. 

• As of March 31, 2024, outstanding borrowings total Rs 1,933.52 crore. Any challenges in servicing these could affect financial standing. 

 Can you share the financial performance of Sagility India? 

Sagility India is a profit-making company. The company posted a profit of ₹228.27 crores for the financial year ending 31 March 2024 on a revenue of ₹4,781.5 crores. Here’s a look at its financials: 

What is the alotment date of Sagility India IPO? 

Sagility India Ltd IPO’s allotment date is 8th November 2024. You can visit the website of the registrar of the IPO to check the allotment status. 

Who are the merchant bankers and registrars of Sagility India IPO? 

ICICI Securities, IIFL Securities, Jefferies India Private Limited and J.P. Morgan India Private Limited are the book-runners. The registrar to the issue is Link Intime India. 

 Should you invest in Sagility India Ltd IPO? 

 Sagility India’s focus on technology and automation, including tools like AI-driven clinical support and payment integrity systems, positions it well to handle rising healthcare demands and regulatory complexities in the U.S.  

 With support from its sponsor EQT, the company plans to grow through both organic expansions and acquisitions, aiming to enhance its service offerings and add new clients. At the upper band of INR 30, the issue is valued at a P/E ratio of 61.52x, based on a FY24 EPS of INR 0.49x. We are recommending a “Subscribe” rating for high-risk investors for this issue.