The initial public offering (IPO) of Suraksha Diagnostic is set to kick off at the bourses on November 29. The company shall be offering its shares in the range of Rs 420-441 apiece. Investors can apply for the issue until Tuesday, December 3, which can be subscribed for a minimum of 34 equity shares and its multiples thereafter.
Incorporated in 2005, Suraksha Diagnostic offers pathology, radiology testing and medical consultancy services. The company has a central reference laboratory with 8 satellite laboratories and 215 customer touchpoints, including 49 diagnostic centres and 166 sample collection centres as of June 30, 2024, across West Bengal, Bihar, Assam, and Meghalaya.
The Rs 846.25 crore IPO of Suraksha Diagnostic is entirely an offer-for-sale (OFS) of up to 1,91,89,330 equity shares by its promoters and existing shareholders. Anchor book for the issue opens on Thursday, November 28. The company will not receive any proceeds from the issue and the selling shareholders will take off all the proceeds after deducting the issue expense.
Suraksha Diagnostic offers its customers online and offline medical consultation services under one roof via 44 diagnostic centres, which house 120 polyclinics with more than 750 doctors. The operation of the diagnostic centres is supported by the technology platforms and systems that the company uses to streamline.
Ahead of its IPO opening on Friday, shares of Suraksha Diagnostics were commanding no grey market premium in the unofficial market. The trend has remained consistent since the issue was formally announced earlier this week. There has been negligible grey market activity in the counter as per various sources.
At the upper price band, Suraksha Diagnostic is valued at FY24 P/E and EV/Sales multiple of 96.1 times/5.1 times respectively based on its post issue capital, said SBI Securities. As of FY24, Suraksha garnered a market share of 1.15-1.30 per cent in its core eastern India market and aims to further expand its presence in the adjacent northeastern markets, it said.
"The company’s operations in core geography, extensive network and reputation will aid in expanding its business coupled with industry growth which is expected to grow from Rs 86,000-87,000 crore bn to Rs 1.27 lakh crore –1.37 lakh crore by FY28, experiencing a CAGR of 10-12 per cent between FY24-FY28," SBI Securities added.
The Kolkata-based company offers vaccination services and customized testing packages for disease prediction/early detection. The company uses digital pathology and artificial intelligence to generate blood tests. All radiology reporting is done through a digital platform that allows cases to be reported from all diagnostic centres, significantly reducing turnaround time.
The company offers its customers online and offline medical consultation services under one roof. The operation of the diagnostic centres is supported by the technology platforms and systems that the company uses to streamline, said Bajaj Broking in its IPO note.
"The company offers vaccination services and customized testing packages for disease prediction/early detection. It uses digital pathology and artificial intelligence to generate blood tests. All radiology reporting is done through a digital platform that allows cases to be reported from all diagnostic centres, significantly reducing turnaround time," it said with a 'subscribe for long term' rating.
The company has reserved 50 per cent of the shares for the qualified institutional bidders (QIBs), while non-institutional investors (NIIs) will have 15 per cent of the equity shares reserved for them. Retail investors will get 35 per cent of the allocation in the issue.
For the quarter ended on June 30, 2024, Suraksha Diagnostic reported a net profit of Rs 7.67 crore with a revenue of Rs 61.85 crore. The company's bottomline stood at Rs 23.13 crore with a revenue of Rs 222.26 crore in the financial year ended on March 31, 2024.
ICICI Securities, Nuvama Wealth Management and SBI Capital Markets are the book running lead managers of the Suraksha Clinic and Diagnostic IPO, while Kfin Technologies is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE on Friday, December 6.