Blog

Laxmi Dental Limited is an integrated dental products company and 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. Laxmi Dental IPO plans to raise of Rs 698.06 crores. The issue is a combination of fresh issue aggregating to Rs 138 crores and offer for sale aggregating to Rs 560.06 crores.

About Laxmi Dental Limited

• Laxmi Dental Limited is a prominent player in the dental products industry in India,
• Established in 2004 by Rajesh Khakhar, the company has evolved from a small dental lab into a significant manufacturer with a diverse portfolio that includes custom crowns, bridges, clear aligners, and other dental products.
• It operates six manufacturing facilities across India and serves over 22,000 dental clinics, with exports to the US and UK markets
• The key products provided by the company are:
  • Custom Crowns and Bridges: Tailored dental prosthetics designed to restore the function and aesthetics of teeth.
  • Clear Aligners: Known as Illusion Aligners, these are India’s first FDA-cleared aligners, providing a discreet orthodontic treatment option.
  • Thermoforming Sheets: Used in the production of dental appliances, these sheets are essential for creating custom-fit solutions.
  • Pediatric Dental Products: Specialized products catering to children’s dental needs, ensuring safe and effective treatments.
  • 3D Printing Resins: Biocompatible materials used for manufacturing dental products through advanced 3D printing technology.
  • Aligner Solutions: A range of products related to clear aligners, enhancing the overall treatment experience.
  • It has six state-of-the-art facilities strategically located in Mira Road, Boisar, and Kochi. These facilities are further supported by five auxiliary centers in major cities such as Mumbai, Delhi, Bengaluru, and Ahmedabad, reinforcing its ability to meet large-scale production demands.
  • They are Employing a workforce of 2,372 individuals.

Financials : Laxmi Dental IPO

Anchors: Laxmi Dental IPO

• Laxmi Dental raised ₹314 crore from anchor investors ahead of its initial public offering (IPO), The company allocated 73.39 lakh shares at a price of ₹428 each to a total of 31 entities, including notable names such as Aditya Birla Sun Life Mutual Fund, ICICI Prudential Mutual Fund, HDFC Mutual Fund, Kotak Mutual Fund, and several foreign investors like Abu Dhabi Investment Authority and Goldman Sachs.

Salient Points: Laxmi Dental IPO

• India’s dental care services market is estimated to be US$ 3.4 Bn in 2023 and expected to grow at a rate ofc12.6% to reach US$ 7.8 Bn in 2030.
• OFS of Rs 560 cr,
  • PE investor OrbiMed is reducing its stake by more than half. 46% stake held for 10 years, to 22%.
  • Promoter 47% stake to drop to 43%.
• Use of Net procceds of Rs. 138 cr
  • Capex Rs. 69 cr
  • Debt repayment Rs. 28 cr
• Laxmi Dental Limited is a prominent player in the dental products industry in India, recognized as the only fully integrated provider of dental solutions in the country.
• Amongst the top two largest dental laboratories in India by Revenue for Fiscal 2023 catering domestic and international markets.
• Second largest player in domestic laboratory business and largest export laboratory with increasing adoption of digital dentistry.
• Domestic sales contributed 67.51% to total revenue in H1 FY25 and balance was from exports.
• Exports are mainly to US and UK,
• They launched clear aligners under brand Illusion Aligners,. They were the first Indian brand to receive 510(k) clearance from US FDA in 2021 for clear aligners. 
• Recent partnership with a major U.S. dental network further enhances growth prospects.

• Company took to B2B2C business model for sale of customized clear aligner solutions and offered a flexible ‘pay as you go’ model along with the upfront payment model. Thus making aligners more affordable to the end customers.
• In 2011, company expanded to a larger facility in Mumbai, followed by the incorporation of USA subsidiary in 2012.
• Listed peer has been shown as Polymed, which does not look proper. They are hardly into dental space.
• Another SME player Prevest DenPro Limited is into development and manufacturing of dental materials used for diagnosis, prevention and treatment of dental conditions. They are ruling at a PE of 45 and have better ebidta margins of 35% compared to 25% clocked by Laxmi Dental last year.
• PE FY25 (last year): Loss ; PE Fy24 – 79 x
• PE investor OrbiMed recently sold stake in the IPOs of Entero Healthcare Solutions Ltd and Suraksha Diagnostic Ltd. In both cases the scrips ended below IPO price primarily due to to stiff pricing of IPO.
• I have a neutral stance on Laxmi Dental IPO. May apply some depending on final QIB response. Large portion of the IPO being OFS, fate of earlier two IPO with which the PE Investor Orbimed was associated (below IPO price), along with an ongoing CBI case against the promoter are some negatives. There is good scope for dental product and service companies which are helping it to attract decent demand and perhaps some listing gains which seems likely at this stage. Otherwise valuation being demanded are difficult to justify.
• In the long run, Laxmi Dental is positioned uniquely within the dental market due to its vertically integrated business model, which allows it to control costs effectively through in-house production of essential components like aligner sheets and 3D printing resins.
• The growth of the market is being driven by the increasing prevalence of Oral Health disorders and greater demand for dental care due to growing awareness among the masses. Thus long term prospects are good including good export potential and ramp up of capacity post the expansion.
• GMP as per social media ruled about Rs. 140 (33%)
• This post is exploratory and educational purposes only.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared 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.