Sagility India Limited, one of the largest technology-enabled, pure-play healthcare focused solutions and services provider to Payers, and Providers, has filed its draft red herring prospectus (DRHP) with the market regulator, Securities and Exchange Board of India (SEBI), to raise funds through an initial public offering (IPO).
The IPO, with a face value of Rs 10 per equity share, is entirely an offer for sale of up to 984.46 million equity shares by Sagility B.V, the Promoter Selling Shareholder. The offer includes a reservation for subscription by eligible employees.
The offer is being made through the book-building process, wherein not less than 75% of the net offer shall be available for allocation on a proportionate basis to qualified institutional buyers, not more than 15% of the net offer shall be available for allocation to non-institutional investors, and not more than 10% of the net offer shall be available for allocation to retail individual investors.
Established in 2021, the Bengaluru based company provides technology-driven services to both Payers and Providers, covering core benefits administration and clinical services. These include claims management, payment integrity, clinical management, and more. For Providers, it offers revenue cycle management services to help with billing and treatment cost claims from Payers. It also extends some of its Payer services to pharmacy benefit managers (PBMs), who manage prescription drugs for insured individuals under health plans.
Health payers are entities that pay for or reimburse healthcare services for insured members through health insurance plans. Healthcare providers are individuals or healthcare facilities that are licensed to deliver care services or aid in care delivery such as doctors, clinics, hospitals, labs, durable medical equipment providers besides others.
Sagility delivers these services through its tools and platforms, utilizing its skilled workforce from five global service delivery centers in India, the Philippines, the U.S., Jamaica, and Colombia.
The company's predecessor began offering services to Payer clients in 2000, gradually expanding its service scope and client base through both organic growth and acquisitions. After its incorporation, Sagility acquired its predecessor's healthcare services business on January 6, 2022. It later acquired additional subsidiaries in March 2024.
In 2023, Avasant recognized Sagility as a Leader in their Clinical Services Business Process Transformation RadarView report, and Everest named it a Leader in their Healthcare Payer Operations PEAK Matrix Assessment.
100% of its clients are based in the U.S as of March 31, 2024 and its top five client groups had an average tenure of 17 years. By January 2024, it served five of the top 10 Payers by enrollment in the U.S., according to Everest Report. Additionally, in the financial years 2023 and 2024, Sagility added 20 new clients.It has a high client sticiness and retention rate due to its nature of service and solutions hence recurring revenues account for a high proportion.
In the Financial Year 2024, Sagility helped Payer clients process 105 million claims and manage over 75 million Member and Provider interactions. It has no listed comparable in India or abroad that cater to US Healthcare Enterprises.
The company is supported by its sponsor, EQT, benefiting from its capital, networks, and professional expertise. As of March 31, 2024, EQT managed EUR 242 billion in assets. Sagility expects to leverage EQT's global expertise for acquisitions, aiming for inorganic growth.
The company began its effort in Robotic Process Automation in 2015 thereafter engaged predictive analytics and complex recognition since 2018. In March 2024, Sagility acquired BirchAI, a healthcare technology firm specializing in cloud-based generative AI technology. This acquisition is expected to enhance Member and Provider engagement and reduce clients' operational costs through AI-powered customer support solutions using speech-to-text and large language models (LLMs) integrated with Sagility's engagement solutions.
As of March 31, 2024, Sagility employed 35,044 people, with 60.52% being women. This was 30,830 people in March 2022.
Sagility India's restated revenue from operations during the fiscal year 2024 increased 12.69% to Rs 4,753.56 crore from Rs 4,218.41 crore in the previous year, primarily due to growth in volumes from existing clients and addition of new SOWs during the Financial Year 2024. Profit after tax grew 58.99% from Rs 143.57 crore for the financial year 2023 to Rs 228.27 crore for the financial year 2024.
Factors that are driving growth in the US Healthcare market are the Rise in aging population, increase in prevalence of chronic diseases, shift towards value based care, increasing consumerization in the US Healthcare Industry, shift in care delivery models, government policy initiatives and growth in health insurance coverage too. Comparatively, the Indian healthcare market is underdeveloped with the latest estimates from World Health Organization ("WHO") showing that the health spending per capita is US$74.0 (?6,178.9) in 2021.
ICICI Securities Limited, IIFL Securities Limited, Jefferies India Private Limited, J.P. Morgan India Private Limited are the book-running lead managers, and Link Intime India Private Limited is the registrar of the issue. |
