IPO Size: Rs. 895 cr

• Fresh Issue of Rs. 95 cr for brownfield capex worth Rs. 76 cr
• Offer for Sale (OFS) of Rs. 800 cr by the promoter (89% stake to shrink to 76%) to retire Rs. 400 cr personal debt, taken to buy out JV partner JRS in 2024  

Price band: Rs. 563-593 per share

M cap: Rs. 6,698 cr, implying 13% dilution

IPO Date: Fri 21^st Nov to Tue 25^th Nov 2025, Listing Fri 28^th Nov 2025

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

Pharma and Food Ingredients Manufacturer

Sudeep Pharma is a 36 year old, Vadodara based manufacturer of pharmaceutical, food, nutrition, and specialty ingredients, with an emphasis on mineral-based products and iron phosphate. Speciality Ingredients has been a fast-growing segment for the company, accounting for 34% of Rs. 500 cr topline now, against 17%, about 4 years ago. Company has 3 plants in Gujarat, with a combined annual manufacturing capacity of 72,246 MT, of which ~50% is utilised. Exports account for 60% of revenue, spread across Europe, North America, Middle East, Asia Pacific.

Healthy Growth Visibility

1. On 22^nd May 2025, Sudeep acquired 85% stake in Nutrition Supplies and Services, an Ireland based manufacturer of customised nutrient pre-mixes for infant milk formulae, food and beverages, for Rs. 136 cr cash. The target company reported Rs. 8 cr revenue and Rs. 3 cr PAT for Q1FY26 respectively.
2. As of 30.6.25, it has Rs. 110 cr CWIP towards a 17,529 sq mt new facility in Gujarat, likely to be commissioned by Mar 2026.
3. From the IPO proceeds, it plans Rs. 76 cr capex to upgrade machinery at existing plant.

As company operates on an asset turn of 2.5-3x, all the above capex has potential to double revenue, upon completion of the entire expansion.  

High Margin Business

On FY25 revenue of Rs. 502 cr, EBITDA margin was at 39%, with net margin of 28%. FY25 PAT stood at Rs. 139 cr, leading to an EPS of Rs. 12.8. Q1FY26 revenue was Rs. 125 cr with 25% net margin and an EPS of Rs. 2.8. On Rs. 681 cr net worth, as of 30.6.25, RoE is close to 20%. Working capital need is high, with debtors outstanding at over 4 months of revenue.

Priced for Sound Fundamentals

M cap of Rs. 6,700 cr, leads to a PE multiple of 41.5x, on historic basis. While this appears high for Rs. 500 cr topline company, growth prospects coupled with high margin makes it attractive.

In May 2025, company had raised Rs. 160 cr from pre-IPO investors Nuvama, Whiteoak, Mukul Agarwal, at Rs. 562.21 per share. After 6 months, a 5.5% premium is justified, merely for time value. Although important to note that promoters OFS size has increased, from 1.01 cr shares during DRHP filing in June 2025 to 1.35 cr shares now.