The initial public offering (IPO) of Laxmi Dental continued to attract a strong response during the third and final day of the bidding process, thanks to an all-round demand. The issue was overall subscribed more than 5 times on day one and ended day two with over 16 times subscription.
Laxmi Dental is selling its shares in the price band of Rs 401-428 apiece. Investors can apply for a minimum of 33 equity shares and its multiples thereafter. The Mumbai-based company is looking to raise Rs 698.06 crore via IPO, which includes a fresh share sale of Rs 138 crore and an offer-for-sale (OFS) of up to 1.31 crore equity shares worth Rs 560.06 crore.
According to the data, the investors made bids for 73,45,67,592 equity shares, or 81.89 times, compared to the 89,70,371 equity shares offered for the subscription by 2.50 pm on Wednesday, January 15, 2025. The three-day bidding for the issue, which kicked off on Monday, January 13, shall conclude today.
The allocation for non-institutional investors (NIIs) saw a subscription of 130.66 times, while the portion reserved for retail investors was subscribed 63.91 times. However, the quota set aside for qualified institutional bidders (QIBs) was subscribed 63.49 times as of the same time.
Incorporated in July 2004, Laxmi Dental is an integrated dental products company. It offers custom crowns and bridges, branded dental items like clear aligners and thermoforming sheets, aligner-related products as part of its aligner solutions, and pediatric dental products.
The grey market premium (GMP) of Laxmi Dental has seen some correction following the rising volatility and lower interest from QIBs. Last heard, the company was commanding a premium of Rs 125-130 per share in the unofficial market, suggesting a listing pop of around 30 per cent for the investors. The GMP stood around Rs 160, before the bidding for issue kicked-off.
Brokerages are mostly positive on the issue suggesting investors to subscribe to it citing the rising demand for dental health and such products, growth opportunities and rising interest in the organized space for dental solutions. However, rich valuations, a big portion of offer-for-sale (OFS) and competition from the unorganized sector dent the prospects for the issue.
Laxmi Dental is one of the leading players in dental consumable market plans to deepen penetration amongst existing dental networks while expanding Dental Network to the other regions. It is one of the few organized players in the dental lab segment having sufficient scale of operations, following quality standards, catering to domestic and international markets, said Master Capital Services.
"Laxmi Dental continues to scale up branded product offerings and undertake product enhancements of existing dental products and launch new dental products. Investors looking to invest can invest in the IPO for the long term," it added.
Ahead of its IPO, Laxmi Dental raised Rs 314.13 crore from anchor investors as it finalised allocation of 73.4 lakh equity shares at a price of Rs 428 apiece. Laxmi Dental reported a net profit of Rs 22.74 crore with a revenue of Rs 117.9 crore for the six months ended on September 30, 2024.
The company has reserved 75 per cent of the net offer for the qualified institutional bidders (QIBs), while non-institutional investors (NIIs) will get 15 per cent of the net offer. Retail investors will have the remaining 10 per cent of the share reserved for them. The company will command a total market capitalization more to Rs 2,350 crore.
Over the past three years, Laxmi Dental has posted an average EPS of Rs. 1.55, from both continued and discontinued operations) and an average return on net worth of 22.77 per cent. The issue is priced at a price-to-book value (P/BV) ratio of 33, based on its net asset value (NAV) of Rs. 12.97 as of September 30, 2024, Bajaj Broking said.
"If we attribute FY25 annualized earnings to its post-IPO fully diluted paid-up equity capital, the asking price corresponds to a price-to-earnings (P/E) ratio of 64.65 times. Based on FY24 earnings, the P/E ratio rises to 130.87 times, indicating that the issue is priced aggressively," it added with a 'subscribe for long-term' rating.
Motilal Oswal Investment Advisors, Nuvama Wealth Management and SBI Capital Markets are the book running lead managers of the Laxmi Dental IPO, while Link Intime India is the registrar for the issue. Shares of the company shall be listed at both BSE and NSE on January 20, 2025, Monday.