Suraksha Diagnostic IPO: The Rs 846.25 crore IPO has received tepid demand from investors even on the second day of the bidding. The IPO will close on Tuesday, December 3. The IPO's equity shares are proposed to be listed on BSE and NSE. The latest grey market premium (GMP) of Suraksha Diagnostic hints at subdued listing ahead.
Suraksha Diagnostic IPO Subscription Status:
By the end of Day 2, the IPO received bids of 34,00,068 equity shares, registering about 25% of the total 1,34,32,533 equity shares offered for subscription. The retail investors' portion subscribed by 45% of its category, while Non-Institutional Investors (NII) have subscribed merely 13% of the total reserved portion. The demand from the Qualified Institutional Buyers(QIBs) portion has seen dull demand.
Suraksha Diagnostic IPO GMP Today:
As per Investor Grain, Suraksha Clinic and Diagnostic IPO's last GMP is ₹0, last updated Dec 3rd 2024 06:54 AM. With the price band of 441.00, Suraksha Clinic and Diagnostic IPO's estimated listing price is ₹441 (cap price + today's GMP). The expected percentage gain/loss per share is 0.00%.
Suraksha Diagnostic IPO Details:
The IPO is a 100% book building, however, an entirely offer for sale (OFS) where selling shareholders are offloading up to Rs 846.25 crore. The IPO will close on December 3. Notably, there will be no bidding on November 30 and December 1st for the IPO, due to the weekend.
The price band for the IPO is at Rs 420 to Rs 441 per share. The face value of the equity share is at Rs 2 each. The bid lot size is 34 Equity Shares and in multiples thereof. The minimum investment allowed to retail investors is Rs 2 lakh.
Book-running lead managers of the IPO are ICICI Securities Limited, Nuvama Wealth Management Limited and SBI Capital Markets Limited, while the registrar of the IPO is KFin Technologies Limited.
Should You Buy?
Brokerage Anand Rathi has highlighted that the company aims to enhance its presence in its operating regions, with a particular focus on Kolkata. Most of its diagnostic centers are situated in urban areas of Kolkata. In addition to focusing on its core geography, the company plans to expand and strengthen its presence in neighbouring regions of eastern and northeastern India.
On the valuation, Anand Rathi said, "At the upper band company is valuing at 99.3x its FY24 earnings along with being valued at 75.0x if we annualize FY25 earnings. Following the issuance of equity shares, the company's market capitalization stands at ₹22,967.6 million, with a market cap-to-sales ratio of 10.5 based on its FY24 earnings."
"The diagnostic sector in which the company operates is highly competitive. Moreover, the company's operations are confined to the eastern part of India, limiting the scope of its market. We believe that the issue is richly priced and recommend "Avoid" rating to the IPO," Anand Rathi said.
On the other hand, Bajaj Broking has recommended to subscribe the IPO with a long-term perspective.
Bajaj Broking in its note said, "If we annualize FY25 earnings to the post-IPO fully diluted equity base, the asking price reflects a P/E of 74.87. Based on FY24 earnings, the P/E stands at 99.32, indicating the IPO is fully priced. For the reported financial periods, while PAT margins are not disclosed in the offer document, the RoCE margins were 23.11% (FY22), 9.05% (FY23), 21.46% (FY24), and 6.32% (Q1-FY25)."
Suraksha Diagnostic offer a one-stop integrated solution for pathology and radiology testing, and medical consultation services to their customers through the extensive operational network, consisting of their flagship central reference laboratory, 8 satellite laboratories (co-located with their diagnostic centres) and 215 customer touchpoints which include 49 diagnostic centres, and 166 sample collection centres (primarily franchised), as of June 30, 2024 across the states of West Bengal, Bihar, Assam, and Meghalaya.
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