| Price | Lot Size | Issue Date | Issue Size |
|---|---|---|---|
| ₹ 28 to ₹ 30 | 500 | 05th Nov, 2024 – 07th Nov, 2024 | ₹ 2,106.60 Cr |
About Sagility India Ltd IPO
Sagility India is a technology-enabled pure-play healthcare-focused solutions and services provider to Payers (US health insurance companies that finance and reimburse the cost of health services) and Providers (primarily hospitals, physicians, and diagnostic and medical devices companies). The company was incorporated in July 2021, and it acquired the healthcare services business of the predecessor company – Hinduja Global Solutions, in January 2022 for a consideration of $ 449 million. The company’s services to Payers cater to various aspects of their operations, including (i) core benefits administration functions such as claims management, enrolment, benefits plan building, premium billing, credentialing, and provider data management and (ii) clinical functions such as utilization management, care management, and population health management. The company’s services to Providers include, revenue cycle management functions such as financial clearance, medical coding, billing, and accounts receivable follow-up services. Further, the company also provides some of the services offered to Payers to pharmacy benefit managers (PBMs) that manage prescription drugs for Members (i.e., insured persons) under health insurance plans.
Objective of the Sagility India Ltd IPO
The company proposes to utilize net proceeds towards funding the following objects:
- Achieve the benefits of listing the Equity Shares on the Stock Exchanges ;
- Carry out the Offer for Sale of up to 70,21,99,262 Equity Shares of the face value of Rs. 10 each by the Promoter selling shareholder.
Rationale To Invest In Sagility India Ltd IPO
Leader in the large and resilient US Payer and Provider solutions market
The HealthCare operations expenditure (i.e. front & back-office functions to support Payers & Providers) was valued at US$201.1 bn in 2023 and is expected to reach ~ US$258.9 billion in 2028. Growth in the US healthcare market is expected to be driven by several factors, including a rise in the ageing population and increasing prevalence of chronic diseases. While the healthcare market is expected to benefit from these tailwinds, challenges are expected to drive outsourcing growth. In 2023, the aggregate outsourcing penetration rate in the US healthcare operations market stood at 21.5-23.5%, resulting in a total outsourced operations spend of US$45.0 billion. While the overall healthcare outsourced operations market is expected to grow at a CAGR of 8.7%, the Payer outsourced market is forecasted to grow at a CAGR of 7.0% from 2023 to 2028. On the other hand, the Provider operations outsourced market is expected to grow at a CAGR of 12.5%. The company have become one of the largest tech-enabled healthcare specialists (by revenue) with coverage across payer and provider marks by building out an end-to-end portfolio of services in the outsourced operations market for both Payers and Providers. The company has been recognised for the quality and scale of our services by industry experts. The company were ranked as a Leader by Avasant in their Clinical Services Business Process Transformation RadarView report 2023 and as a Leader in Everest’s Healthcare Payer Operations PEAK Matrix Assessment 2023.
Domain expertise in healthcare operations, with end-to-end service offerings to Payers and Providers
The company provides Technology-enabled services to Payer and Provider clients. This pure-play nature of the company’s business, with 24+ years of Business experience and the effective use of technology, has helped the company build domain expertise in its operations. Sagility provides end-to-end, comprehensive service offerings to Payer clients. The company’s teams have extensive healthcare expertise and experience, with 1,920 employees having nursing, medical coding, physical therapy, dentistry, pharmacy, occupational therapy, microbiology or laboratory science degrees as of June 30, 2024. Further, the company’s domain expertise also helps it to contextualize the use of technology, from RPAs to Gen AI, among other things, to optimize the pre-authorization process, assess and manage claims, respond to questions from Members, and handle grievances for Payers. The non-discretionary nature and the domain specificity of services (as opposed to shared service services such as finance, accounting, and procurement) lead to higher client stickiness.
Valuation of Sagility India Ltd IPO
The company was incorporated in July 2021, and it acquired the healthcare services business of the predecessor company -Hinduja Global Solutions, in January 2022. The predecessor company commenced providing services to Payer clients in 2000 and gradually increased the scope of services offered to Payers and Providers. Sagility India is a technology-enabled, pure-play healthcare-focused solutions and services provider to Payers – US health insurance companies, which finance and reimburse the cost of health services; and Providers -primarily hospitals, physicians, and diagnostic and medical devices companies. The company has become one of the largest tech-enabled healthcare specialists (by revenue) with coverage across payer and provider markets. Within the healthcare operations outsourced market, the company had a 1.2% and 1.2% share in 2022 and 2023, respectively. As of June 30, 2024, its five largest client groups had an average tenure of 17 years with the Business. As of January 2024, the company served 5 of the top 10 Payers by enrolment in the US Financially, the company’s revenue from operations grew by 9.6% to Rs.1,223 crores for the quarter ended June 30, 2024, from Rs. 1,116 crores for the quarter that ended June 30, 2023, and by 12.69% to Rs. 4,753 crores in FY24 from Rs. 4,218.4 crores in FY23. The company reported 23.5% and 17.8% EBITDA margins for FY24 and the quarter ending June 30, 2024, respectively. The issue is valued at a P/E of 56.6x on the upper price band based on FY24 earnings, which is deemed fair. Therefore, we recommend a “SUBSCRIBE” rating for the issue.
What is the Sagility India Ltd IPO?
Sagility India IPO is a book built issue of Rs 2,106.60 crores. The issue is entirely an offer for sale of 70.22 crore shares. Sagility India IPO opens for subscription on November 5, 2024 and closes on November 7, 2024. The allotment for the Sagility India IPO is expected to be finalized on Friday, November 8, 2024. Sagility India IPO will list on BSE, NSE with tentative listing date fixed as Tuesday, November 12, 2024. Login to your account now.
How to apply for the Sagility India Ltd IPO through StoxBox?
To apply for the Sagility India Ltd IPO through StoxBox one can apply from the website and also from the app. Click here
When will the Sagility India Ltd IPO open?
Sagility India Ltd IPO is opening on 05th November 2024. Apply Now
What is the lot size of the Sagility India Ltd IPO?
The Lot Size of Sagility India Ltd IPO is 500 equity shares. Login to your account now
When is the Sagility India Ltd IPO allotment date?
The allotment Date for Sagility India Ltd IPO is 08th November 2024. Login to your account now.
When is the Sagility India Ltd IPO listing date?
The listing Date for Sagility India Ltd IPO is 12th November 2024. Login to your account now
What is the minimum investment required for the Sagility India Ltd IPO?
In the Retail segment the minimum investment required is Rs. 15,000. Login to your account now
What is the maximum investment allowed for the Sagility India Ltd IPO?
In the Retail segment the maximum investment requirement is Rs. 195,000. Login to your account now
What are the risks associated with investing in the Sagility India Ltd IPO?
- The healthcare services industry is intensely competitive, and failure to compete effectively may negatively impact the company’s business, financial condition, and operational results. Increased competition could result in pricing pressures and potentially unfavourable contract terms, affecting overall operating outcomes. Additionally, competitors may secure exclusive agreements with current or prospective clients, hindering the company’s growth opportunities and revenue generation.
- The business could be adversely affected if the company cannot keep pace with technological changes, sufficiently invest and successfully yield the intended results from investments in technology. There is a risk that the company may not adequately invest in technology at sufficient speed and scale or evolve our business with suitable technological investments to adapt to changes in our market.
- High voluntary attrition rates, recorded at 27.34% in Q1 FY24, also present challenges, resulting in greater recruitment and training expenses. Recruitment costs alone were Rs. 63.86 million in Q1FY24, a notable increase from Rs. 43.03 million in Q1FY23.
When will the Sagility India Ltd IPO shares be credited to my Demat account?
The Sagility India Ltd IPO be credited to the account on allotment date which is 11th November 2024. Login to your account now
Where can I find the Sagility India Ltd IPO prospectus?
The prospectus of Sagility India Ltd IPO prospectus can be find on the website of SEBI, NSE and BSE
What are the important dates related to Sagility India LtdIPO?
| IPO Open Date | Tuesday, November 5, 2024 |
| IPO Close Date | Thursday, November 7, 2024 |
| Basis of Allotment | Friday, November 8, 2024 |
| Initiation of Refunds | Friday, November 8, 2024 |
| Credit of Shares to Demat | Monday, November 11, 2024 |
| Listing Date | Tuesday, November 12, 2024 |
| Cut-off time for UPI mandate confirmation | 5 PM on November 7, 2024 |
