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Hemant Surgical Industries IPO aims to raise Rs. 24.84 crore by a fresh issue of 2,760,000 equity shares of Rs. 10 each. The issue is priced at Rs. 85 to Rs. 90 per share. The IPO will open on May 24, 2023 and close on May 26, 2023.Hemant Surgical Industries Limited (HSIL) is a medical devices company based in Jaipur, Rajasthan. The company was founded in 1989 by Hemant Agarwal and is engaged in the manufacturing, importing, assembling, and marketing of a complete and full-fledged product portfolio of medical equipment and disposables.

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Anchor Investors:

• The company is engaged in the business of manufacturing, importing, assembling and marketing a comprehensive portfolio of medical equipment and disposables.
• The product offerings cover a wide spectrum of equipment and disposables required for (i) Renal Care, (ii) cardiovascular disease (iii) respiratory disease (iv) Critical Care and Radiology and (v) surgical disposables.
• The wide range of products includes some of the indigenously manufactured products along with some other products that are imported from countries like: Japan, China and France, Australia and are further processed in our assembly units.
• Hemant Surgical Industries Limited was incorporated in the year 1989 and became the Sole Agent for IMS Co, Ltd, Japan, and also become an authorized agent for IMS Singapore Pte Ltd, Singapore.
• In order to expand the company’s business from medical disposables Products Company ventured into a specialized field of Hemodialysis and Renal Care. The company got the agency of Gambro AG, Sweden engaged in renal treatment products, like Hemodialysis Machines and consumables which are used for patients suffering from kidney failure. The company also started importing calibrated Fresenius Refurbish Machines from France to provide to economical affordability to the dialysis center.
• In a span of 20 years the company was successful in installing more than 3000 machines across India. Besides Hemodialysis Machines Dialysis needs accessories such as Hemodailyzers, Bloodline Tubing, AV Fistula Needles, Transducer Protector, Catheters which are imported by the company.
• The company further expanded by setting up a manufacturing Plant at Acchad Industrial Estate, Accahd, District Thane, India for manufacturing of Hemodailysis Fluid, Hot/Cold Disinfectants and Sanitizers etc. All Equipments and Machineries are fully automatic with minimum human interference and touch.
• After the success in the first and Second manufacturing plants at Accahd and Atgoan, the company started its 3rd Processing Plant in Atgaon for rewinding, slitting, and Packaging of JMS Meditape in 2016 under the supervision of JMS Co. Ltd. Japan. This was implemented to meet the growing demand for JMS Meditape Micropore tape and avoid the issues related to availability and supplies
• It then set up 4th Manufacturing Plant for the assembling of SWS Dialysis Machines and JMS (Singapore) products like Intravenous and Blood transfusion sets. at a 50,000 sq. ft. state-of-the-art assembly line.

• Hanskumar Shamji Shah, Kaushik Hanskumar Shah and Hemant Praful Shah are the promoters of the company.

Hemant Surgical Industries IPO: Financials

Salient Points

• The Promoter and Promoter Group shareholding which is collectively 95.00% of the pre- Offer paid-up Share Capital of the Company. Post IPO it shall be 69.62%.
• Key customers of company majorly include (i) hospitals and diagnostic centres; (ii) Distributors and dealers and (iii) independent doctors. Our top 10 customers accounted for approximately 40.65%, 39.03% and 33.26% of its revenue from operations in Fiscals 2023, 2022 and 2021 respectively.
• It intends to use the Net Proceeds to install Surgical Tape Coating Machine for setting up a coating plant of Meditapes and to install Injection Moulding Machine, for moulding plastic parts of medical disposables.
• The company is an authorized agent for feather which is based in Japan and famous across the globe for manufacturing Skin Grafting & Surgical Blades. The company is marketing their products and is very well accepted across India. The company represents a Chinese company for marketing their All Silicone Foley Catheters in front of Latex Catheters which is Injurious to health. With hard efforts and consistent pursuance, the company is successful to gain a 30 % market share on the national level.
• The company further extended its hands by renting out its Dialysis Machines to leading most Nephrologists and doing a joint venture on a profit-sharing basis for running dialysis Centers. The company took over its first Dialysis Centre in form of Sanjeevani Hospital, Malad in the year 2018. The company has started another Dialysis Center with 20 units in partnership with a local partner in Nairobi Kenya. The name of that center is London Clinic & Dialysis center. The company aims to open a chain of dialysis centres across India and other countries to provide quality dialysis at affordable rates.
• The company also started participating in exhibitions outside India for focusing on exports to African & Gulf countries. Thereafter the companies have been successful in exporting their Hemodialysis Equipment & disposables and have started gaining International Reorganization. The company has Achieved Success in the Commissioning of more than 45 Dialysis centers turnkey projects globally.
• The company shown steady growth in its top and bottom lines

• The company intends to utilize the Net IPO Proceeds for the following objects

• A Comparison with the listed peers mentioned in its RHP is depicted below:

• Its PE ratio is 12x (fy23 earnings). There has been a steady growth n revenues and profits from the last few years.
• I intend to apply in Hemant Surgical Industries IPO. Past performance and prospects look good to me.
• SME IPO in general are more volatile and risky.
• The lead book running manager is Hem Securities. The IPOs lead managed by them have given decent return to the investors. These include names like Chaman Mettalics, Systango Technologies, Labelkraft, Concord Control Systems Limited, Earthstahl & Alloys Limited, Silicon Rental Solutions Limited, Krishna Defence and Allied Industries, Prevest Denpro Limited etc.
• GMP as reported on social media has been inching up and may be more than Rs. 45+..
• Please do your own diligence as SME IPOs are more volatile and risky than mainboard IPOs and need more funds.

• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.