SPC Life Sciences Limited IPO

Established in 2005, SPC Life Sciences Limited IPO is a renowned integrated chemicals company located in Gujarat. It manufactures a diverse range of basic and advanced intermediates. Today, this company is among the leading manufacturers of API and KSMs and is equipped to delve into the complicated world of chemistry at different sites. 

SPC Life Sciences Limited IPO filed its preliminary papers in March 2023 with SEBI with the plan to launch an IPO. After receiving SEBI’s approval, this company is executing its plan to raise Rs. 300 crore through the upcoming SPC Life Sciences Limited IPO. 

This blog will take you through the essential information from the DRHP that shall help you plan your investment strategy. 

About the Company

SPC Life Sciences Pvt Ltd is the world’s largest producer of 6-Chloro-Hexane-2-One. This is an intermediate for the cardiovascular drug, Pentoxifylline, Tradzole, Cilostazol, Amiodarone HCL, Paroxetine and Tradmol.

The Gujarat-based drug-manufacturing company is a knowledge-driven and integrated chemical company specialising in long-chain and multi-reaction processes. The company’s offerings include basic and advanced intermediates, custom APIs and key starting materials. 

With time, SPC Life Sciences Ltd evolved its development strategy rapidly with intensive capital investments and a focus on innovations. With these, today, this company is one of the renowned manufacturers and suppliers to several global pharmaceutical companies. 

As of February 2023, SPC Life Sciences Pvt Ltd Ankleshwar has four manufacturing units with a total capacity of 225.3 KL. In March 2023, this company commissioned the construction of a new manufacturing site in Dahej Gujarat. This manufacturing block in Dahej shall mainly pay attention to manufacturing pharma intermediates and speciality chemicals such as bromobenzene and NPBR.

Since its incorporation, SPC Life Sciences Ltd has manufactured around 50 pharmaceuticals for API spreading across 11 therapeutic areas. The company invests and focuses on its R&D activities to create a unique identity that helps this brand stand out from its competitors. Its products are used for making anti-depressants, vasodilators, antipsychotics and cardiovascular drugs. 

Till January 2023, this company supplied its products to 35+ customers across 10 countries. Some of the international markets are in North America, Europe, China, Israel and South America. Furthermore, one of its facilities is FDA-approved, allowing the company to create US-compliant products.

Moving to finances, the total income of SPC Life Sciences Ltd grew from Rs. 1,214.73 million in FY 2020 to Rs 1,375.67 million in FY 2021. The total profits of this company after tax in FY 2020 was Rs. 103.83 million. This grew to become 166.7 million in FY 2021 reflecting the company’s attempts to grow its profitability.

Also Read: How To Apply For An IPO?

IPO Details and Objectives

According to news reports, SPC Life Sciences Ltd filed a Draft Red Herring Prospectus with SEBI on March 27, 2023. According to the SPC Life Sciences Ltd DRHP, the company expressed its plan to raise Rs. 300 crore by issuing fresh shares. 

The company will also launch an offer for sale (OFS) by the promoter. The sole selling shareholder for this upcoming OFS is Snehal Ravjibhai Patel who will offer up to 89,38,870 equity shares. All proceeds from this will go to the promoter alone. The IPO shares will be listed on BSE and NSE after its launch. 

The face value of equity shares for this IPO is Rs. 10 per share. However, this company has yet to declare the total offer size and worth of the upcoming IPO issue along with bid opening and closing dates. If you are an interested investor, consider keeping an eye on the IPO’s tentative timeline, lot sizes and other details.

SPC Life Sciences Limited plans to use most of its net proceeds to provide capital expenditure for a Phase-2 manufacturing unit in Dahej. It will also look into prepayment and scheduled repayment of certain debts. The company will use the remaining amount for general corporate purposes and to fund its working capital requirements. 

Strengths

Let’s take a look at some of the strengths of SPC Life Sciences Pvt Ltd. that make this company a worthy investment. 

• SPC Life Sciences Limited has a robust sales and marketing capability.
• This company pays special attention to environmental concerns, quality, safety and health of its employees involved in the manufacturing process. 
• It has been successful in maintaining a long-standing relationship with a diversified customer base present both within and outside India. 
• The company runs under the leadership of an experienced technocrat and an active corporate environment. 
• The complex manufacturing process and strict compliance requirements set a high entry barrier for the company.
• The R&D team is experienced in studying and analysing chemistries that involve long-chain and multi-chain reactions. 
• This company has a strong and diversified product portfolio that involves Pharma Intermediates and KSMs.

Risks Involved

You must also know the following risks associated with this company before investing in the upcoming SPC Life Sciences Limited IPO. 

• This company is subject to regular inspections and audits. Any failure from its end to comply with regulations might lead to the cancellation of ongoing or future orders from customers. 
• The business is subject to certain risks that involve storage, manufacture and usage of hazardous materials. A failure could result in an industrial accident.
• The company’s customers have stringent standards for the quality of goods supplied to them. A failure from SPC Life Sciences’s end on product quality standards or delivery timeline could result in a loss of customers.
• Several factors outside the company’s direct control can affect its operations. Equipment failure, strikes, breakdowns or industrial accidents could halt activities indefinitely. 

Also Read: Risk of investing in IPO

Summary 

The information above shall help you plan an informed investment strategy for the upcoming SPC Life Sciences Limited IPO. If you are a novice investor, consider seeking help from a financial expert. They shall assist you in this journey keeping in mind your risk appetite and financial goals. 

SPC Life Sciences Limited IPO FAQs