Sudeep Pharma

• Sudeep Pharma is coming out with a 100% book building; initial public offering (IPO) of 1,51,78,114 shares of 1 each in a price band Rs 563-593 per equity share. 
• Not more than 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 35% for the retail investors.
• The issue will open for subscription on November 21, 2025 and will close on November 25, 2025.
• The shares will be listed on BSE as well as NSE.
• The face value of the share is Rs 1 and is priced 563.00 times of its face value on the lower side and 593.00 times on the higher side.
• Book running lead managers to the issue are ICICI Securities and IIFL Capital Services.
• Compliance Officer for the issue is Dimple Ashwinbhai Mehta.

Profile of the company

Sudeep Pharma is a technology led manufacturer of excipients and specialty ingredients for the pharmaceutical, food and nutrition industries and are dedicated to contributing to the global healthcare ecosystem. It leverages its in-house developed technologies for processes such as encapsulation, spray drying, granulation, trituration, liposomal preparations and blending in an effort to drive innovation in its operations. The company has established a presence in both, domestic and international markets, including key regions such as the United States, South America, Europe, the Middle East, Africa, and Asia-Pacific.

The company is one of the largest producers of food-grade iron phosphate for infant nutrition, clinical nutrition, and the food and beverage sectors, in terms of production capacity with a combined annual available manufacturing capacity of 72,246 metric tons (MT), as of June 30, 2025. As of the same date, one of its Manufacturing Facilities has been approved by the United States Food and Drug Administration (USFDA) for the manufacture of mineral-based ingredients. It is one of the largest exporters of mineral ingredients for pharmaceutical, food and nutrition industries from India to global markets in terms of volume of products exported during 2024, as of December 31, 2024. Further, it was the only company in India and one of nine companies globally with certification of suitability issued by the Council of Europe (CEP) and written confirmation certification for sale of calcium carbonate as an active pharmaceutical ingredient (API) in the European Union as of June 30, 2025. The company is one of the pioneers in India to introduce a product range of liposomal ingredients for nutrient absorption and stability.

The company has expanded its global presence to around 100 countries, as of June 30, 2025. In order to capitalize on market opportunities and meet the growing demands of local industries, the company has established regional sales offices with dedicated teams in key geographies, including the United States, Europe, United Kingdom and Latin America. Its regional hubs play a crucial role in bridging market gaps, strengthening customer relationships, and driving growth. It has also entered into stocking agreements with third parties to support its international sales, which enable it to expand its market reach and provide localized support to its international customers. By positioning itself across multiple continents, it has enhanced its global footprint and ability to deliver localized expertise, with an aim to foster deeper connections with customers and partners in these regions.

Proceed is being used for:

• Capital expenditure towards procurement of machinery for its production line located at Nandesari Facility I
• General corporate purposes

Industry Overview

India's food and nutritional ingredients market is witnessing robust growth, driven by increasing health awareness, urbanization, and a growing middle class with a focus on wellness. In 2024, India’s demand for food ingredients is estimated to be around $22 billion. The market is expected to grow at a CAGR of 8.1% between 2024 to 2029, with demand reaching $32 billion in 2029. The Indian food ingredients market is led by the bakery and confectionery segment with a market share of 35%, where ingredients like preservatives, emulsifiers, and flours are used to enhance shelf life, texture, and structure. Moreover, India's specialty food ingredients market is evolving rapidly, supported by consumer demand for innovative, high-quality, and functional food solutions. Ingredients such as encapsulated preservatives play a pivotal role in enhancing the shelf life of bakery and processed products without compromising freshness. Encapsulated acidulants are used for better flavor management in confectionery and beverages, while Leavening agents are employed for superior texture and consistency in baked goods. In 2024, India's demand for specialty food ingredients is estimated to be around $4.3 billion. The market is expected to grow at a CAGR of 8.1% between 2024 to 2029, with demand reaching $6.4 billion in 2029.

Meanwhile, the Indian Nutraceutical Industry has the potential to play a pivotal role in addressing health challenges and significantly contribute to India's GDP. The demand for nutritional ingredients in India has witnessed a CAGR of 7.1% from 2019 to 2024 to reach around $7.2 billion in 2024. The market is anticipated to exhibit a CAGR of 8.7% between 2024 and 2029, with demand forecasted to reach $10.9 billion by 2029. In India, vitamins and minerals are integral components of dietary supplements, often recommended by healthcare professionals to complement treatment for a variety of health conditions, ranging from mild to chronic illnesses. These essential nutrients play a pivotal role in enhancing immunity, promoting overall well-being, and expediting recovery from illnesses. The Vitamins and Minerals market in India, currently valued at $2.1 billion in 2024, is set for significant growth. Forecasts predict robust growth at a CAGR of 8% from 2024 to 2029, with the market expected to reach around $3.0 billion by 2029.

Further, the specialty nutritional ingredients market in India is experiencing robust growth, driven by rising consumer awareness about health and wellness, increased disposable income, and a growing demand for fortified and functional foods. Key ingredients such as encapsulated vitamins, minerals, amino acids, granulated products, and vitamins and minerals premixes are witnessing significant adoption across various sectors, including dietary supplements, fortified foods and beverages, infant and sports nutrition among others. In 2024, India’s specialty nutritional ingredients market is estimated to be around $613 million. The market is expected to grow at a CAGR of 7.8% between 2024 to 2029, with demand reaching $892 million in 2029. 

Pros and strengths

Market leadership with a diversified product portfolio in a high barrier industry: The company is a leading manufacturer of pharmaceutical, food, nutrition, and specialty ingredients, in terms of production volume, as of June 30, 2025, with an emphasis on mineral-based products and iron phosphate. As of June 30, 2025, it is a leading manufacturer of specialty food ingredients in India with a wide portfolio of products including encapsulated preservatives, such as sorbic acid and calcium propionate, which are extensively used in baked goods to prolong shelf life and prevent microbial growth. Its market leadership is reinforced by its comprehensive product portfolio. From its early focus on excipients, it has broadened its product range to include specialized ingredient solutions.

Distinguished global customer base with long-standing relationships with key customers: The company’s expansive global customer network includes companies in the pharmaceuticals, food and nutrition, and FMCG sectors. As of June 30, 2025, the company has served over 1,100 customers across multiple regions, including partnerships spanning several decades. Its robust customer base includes over 40 blue-chip multinational companies across the pharmaceutical, food, and nutrition industries, as of June 30, 2025. As of June 30, 2025, the company has 14 global Fortune 500 companies as its customers. The average tenure of its relationship with its five largest customers in terms of revenue from operations for the three months ended June 30, 2025 is 7.08 years as of June 30, 2025.

Well-equipped and regulatory compliant Manufacturing Facilities: The company operates four Manufacturing Facilities with 12 production lines as of June 30, 2025. Two of these facilities, located in Gujarat, are dedicated to the manufacturing of pharmaceutical and food-grade minerals, while one facility in Gujarat exclusively produces specialty ingredients for the food and nutrition industry. Further, pursuant to its acquisition of NSS as a Material Subsidiary with effect from May 22, 2025, it also has a manufacturing facility in Ireland. These facilities span a total land area of approximately 68,446 square meters and have a total annual available production capacity of 72,246 MT, as of June 30, 2025. Its facilities are equipped with advanced automation and modern machinery that enable precise control over production parameters, ensuring consistent quality and enhanced purity.

Strong research and development capabilities: The company’s R&D capabilities have been critical to its success and a differentiating factor from its competitors. Its R&D efforts focus on particle engineering, extending product shelf life, enhancing nutrient bioavailability and addressing formulation challenges. As of June 30, 2025, it operates two R&D facilities that have a dedicated team of 41 personnel. This facility is equipped with advanced machinery including fluidized bed coaters, spray dryers, tablet compression machines, and blenders, that enable it to refine its production technologies, improve sustainability, and expand its product portfolio. It has undertaken over 420 R&D projects during the last three Fiscals and three months ended June 30, 2025, driven by a combination of customer-driven requirements, in-house initiatives to address market opportunities, create innovative solutions for existing formulations or to overcome operational challenges. As a result of such initiatives, the company was able to successfully commercialise 127 products that include newly developed products as well as variants of existing products such as different stock-keeping units, ingredient strengths, and optimized formulations designed to meet diverse industry needs.

Risks and concerns

Significantly depends on key customers: The company generates a significant portion of its revenues from a limited number of customers. The company has garnered 40.78%, 35.33% and 42.98% of its total revenue from top 10 customers in FY25, FY24 and FY23 respectively. The loss of such customers or a decline in demand from such customers could adversely affect its business, results of operations, financial condition, and cash flows.

Exposure to international market and trade policy risks: The company generates a substantial portion of its revenue from operations from its export sales. The company has garnered 58.68%, 59.27%, 64.43% and 68.45% of its revenue from operations for the three months ended June 30, 2025 and Fiscals 2025, 2024 and 2023, respectively and any adverse developments in such regions, including the imposition of tariffs or other anti-sourcing legislation, could adversely affect its business, results of operations, financial condition and cash flows.

Reliance on key suppliers for critical raw materials: The company relies on third-party suppliers for the supply of raw materials such as mineral calcium, phosphoric acid and sorbic acid. It typically procures these materials through purchase orders which set out the terms and conditions in relation to quantity, quality, pricing and delivery details and do not enter into long-term or exclusive supply agreements with its suppliers. The company procured 64.02%, 61.39% and 74.35% of its raw material supply from top 10 suppliers in FY25, FY24 and FY23 respectively. If any one or more of these suppliers of its raw materials, fails to deliver its requirements, its production could be disrupted. In addition, as a result of a shortage, it may be compelled to delay shipments of its products, or devote additional resources to maintaining higher levels of inventory.

Risk from concentrated manufacturing footprint: The company operates four Manufacturing Facilities as of June 30, 2025, with a combined annual available manufacturing capacity of 72,246 MT, of which three are located in Vadodara, Gujarat. Of its two R&D facilities as of June 30, 2025, it has one dedicated R&D facility in Vadodara, Gujarat. In addition, the company is in the process of commissioning another manufacturing facility at Nandesari, Gujarat. Consequently, any significant social, political or economic disruption, or natural calamities or civil disruptions in this region, or changes in the policies of the state or local governments of this region or the Government of India, could require it to incur significant capital expenditure and change its business strategy. The occurrence of, or its inability to effectively respond to any such event, could have an adverse effect on its business, results of operations, financial condition and cash flows.

Outlook

Sudeep Pharma is a manufacturer of pharmaceutical excipients, food-grade minerals, and specialty nutrition ingredients serving over 100 countries. The company has market leadership with a diversified product portfolio in a high barrier industry. Moreover, it has distinguished global customer base with long-standing relationships with key customers. On the concern side, the company generates a significant portion of its revenues from a limited number of customers and the loss of such customers or a decline in demand from such customers could adversely affect its business, results of operations, financial condition, and cash flows. Moreover, the company generated maximum revenue from operations from its pharmaceutical, food and nutrition segment and any adverse developments affecting this segment may adversely affect its business, results of operations, financial condition, and cash flows. 

The issue has been offering 1,51,78,114 shares in a price band of Rs 563-593 per equity share. The aggregate size of the offer is around Rs 854.53 crore to Rs 900.06 crore based on lower and upper price band respectively. Minimum application is to be made for 25 shares and in multiples thereon, thereafter. On performance front, the company’s revenue from operations increased by 9.30% from Rs 4,592.81 million in Fiscal 2024 to Rs 5,019.99 million in Fiscal 2025. Moreover, the company’s profit for the year attributable to owners was Rs 1,386.91 million in Fiscal 2025 as compared to Rs 1,331.87 million in Fiscal 2024, an increase of 4.13%.

The company’s Manufacturing Facilities has received several global approvals, including USFDA approval for the manufacture of mineral-based food ingredients at Nandesari Facility I, as of June 30, 2025. These approvals have enabled it to expand its operations in highly regulated markets such as the United States and Europe, where product compliance, quality consistency, and traceability are critical. It is in the process of scaling its exports of key ingredients such as calcium carbonate and iron phosphate, which, is essential for fortified foods, dietary supplements, and oral solid formulations. In order to strengthen its global position, it is transitioning from a distributor-led model to direct market access, supported by investments in warehousing infrastructure in the United States and Europe, and growing local sales and technical support teams in key regions. It is undertaking such initiatives to reduce lead times, enhance service, and increase its visibility and control across the customer value chain. It also aims to cross sell its products to existing customers in the food and nutraceutical industries.