Should You Consider Investing in Sagility India IPO?

Sagility India Limited, previously known as Berkmeer India Private Limited, is a healthcare-focused company providing essential solutions and services to leading US health insurers (payers) and healthcare providers. These services span a broad range of operational needs, such as claims management, payment integrity, clinical management, and revenue cycle management, which position Sagility as an indispensable partner in the healthcare ecosystem. With its upcoming Initial Public Offering (IPO), opening for subscription on November 5, 2024, Sagility India offers investors an opportunity to engage with a growing sector and company. Sagility IPO is valued at ₹2,106.60 crores with shares priced in the range of ₹28-30 each. The minimum lot size for retail investors is 500 shares, totaling ₹15,000, and the listing date is set for November 12, 2024, on the BSE and NSE.

Sagility India stands as a critical player in the healthcare solutions industry, operating a comprehensive service suite that directly supports the operational and financial needs of payers, healthcare providers, and pharmacy benefit managers (PBMs).

Some key services include:

• Claims Management and Payment Integrity: Sagility India enables health insurers to streamline claims processes, reducing errors and ensuring timely, accurate payments.
• Clinical Management and Support Services: From patient support to clinical assessments, these services help healthcare providers improve the quality and efficiency of patient care.
• Revenue Cycle Management for Providers: Sagility India assists healthcare facilities with effective billing and revenue cycle strategies, ensuring accurate and timely payment from insurers.

With 35,044 employees, Sagility’s skilled workforce is diverse, with over 60% being women. The company also employs certified professionals, including medical coders and registered nurses, underscoring its dedication to expertise and quality in the healthcare field.

Why should you consider investing Sagility India’s IPO

• Proven Leadership in the US Healthcare Market: Sagility India is a trusted partner for leading health insurers in the US, with longstanding relationships averaging 17 years with its top five clients. Such long-term partnerships indicate high levels of trust and satisfaction among its clients, which strengthens Sagility’s market position.
• Diverse, Comprehensive Service Portfolio: Sagility India offers a broad range of essential healthcare services. By catering to both payers and providers, the company meets varied needs across the healthcare continuum, providing consistent value and operational support in areas like claims processing, clinical management, and revenue cycle management.
• Consistent Client Base Expansion: Sagility India’s client base has grown with the addition of 20 new clients in FY2023-24. This growth demonstrates the company’s ability to attract and retain business within a competitive industry, showcasing Sagility’s adaptability and relevance in the healthcare market.
• Impressive Financial Growth Trajectory: Between FY2023 and FY2024, Sagility India's revenue grew by 13%, while profit after tax (PAT) surged by 59%. This steady growth showcases a strong financial model capable of sustaining expansion and rewarding investors over time.
• Diverse, Highly Skilled Workforce: Sagility’s workforce includes a significant number of certified professionals, ensuring that its services are managed by experts in the field. This skilled and inclusive team is vital to maintaining Sagility’s service quality and meeting the high standards expected by US-based clients.

Key Details of Sagility India’s IPO

• IPO Dates: November 5, 2024 – November 7, 2024
• Price Band: ₹28 – ₹30 per share
• Minimum Investment: ₹15,000 (500 shares per lot for retail investors)
• Total Issue Size: ₹2,106.60 crore (Offer for Sale)
• Listing Date: November 12, 2024
• Employee Discount: ₹2 per share for eligible employees

Financial Highlights

Sagility India’s consistent financial growth strengthens its position as a stable investment. Here’s a summary:

The increase in revenue and PAT reflects Sagility India’s steady upward trajectory, with assets and net worth displaying strong growth. These financials indicate stability and potential for future expansion, driven by demand in healthcare.

Market Position and Growth Prospects

• Sagility India operates within a rapidly growing US healthcare sector, which is projected to expand annually by 5.5%, driven by increasing complexity in claims and revenue management. The need for efficiency, accuracy, and compliance in healthcare administration continues to rise, providing fertile ground for Sagility’s services.
• The demand for advanced healthcare solutions in the US, combined with Sagility's operational capacity and specialised services, positions it to capitalise on the projected growth in healthcare expenditure. The sector’s rising need for accuracy and timeliness in claims, payments, and clinical support is expected to continue, providing Sagility with a stable foundation for future growth.
• Healthcare spending in the U.S. has grown steadily, with an average annual growth rate of 5.0% from 2014 to 2023, reaching a significant $4.7 trillion (₹389.6 trillion) in 2023. This spending is projected to continue rising at a rate of 5.5%, expected to reach $6.1 trillion (₹509.8 trillion) by 2028.

Key Strengths and Competitive Advantages

• Long-Standing Client Relationships: Sagility has built strong relationships with top-tier US clients, boasting an average tenure of 17 years with its major customers. This customer loyalty reflects Sagility’s reliability and its deep understanding of client needs.
• Diverse Service Portfolio and Specialized Expertise: Sagility offers a vast range of healthcare services, from claims processing to clinical support. This comprehensive suite enables it to meet the unique requirements of payers, providers, and PBMs, making it a versatile partner within the healthcare sector.
• Commitment to Innovation and Efficiency: Sagility continually optimizes processes like payment integrity and claims management, ensuring accurate, timely services that reduce costs and enhance efficiency for clients.
• Strong Presence in the US Market: Sagility is well-positioned within the US healthcare market, catering to top health insurers and healthcare providers. Its robust presence in a high-value market is a key competitive advantage, especially given the stringent regulations and demands of the US healthcare system.
• Experienced, Diverse Workforce: Sagility’s commitment to diversity and professional certifications ensures its team is well-equipped to meet the specific needs of healthcare clients, enhancing trust and service quality.

Conclusion

Sagility India Limited offers a unique investment opportunity within the healthcare solutions sector, serving key players in the US healthcare market. Its extensive service offerings, skilled workforce, and proven financial growth make Sagility an appealing prospect for investors looking to invest in a stable, high-growth market. Sagility’s established client base, commitment to innovation, and solid market position provide a strong foundation for sustained growth. With its upcoming IPO, Sagility India presents a timely opportunity for investors focused on healthcare’s expanding role in today’s economy.