Suraksha Diagnostic Limited offers pathology, radiology testing and medical consultancy services. Suraksha Diagnostic IPO intends to raise Rs 846.25 crores. The issue is entirely an offer for sale.
| IPO opens | November 29, 2024 |
| IPO Closes | December 3, 2024 |
| IPO Size (Rs.) | ₹846.25 Cr |
| Breakup | OFS only |
| Face Value: | ₹ 2 |
| IPO Price in Rs : | ₹420 to ₹441 per share |
| Minimum Lot | 101 Shares |
| Listing At | NSE , BSE (mainboard) |
| QIB | ~75 % |
| NII Quota | ~15% |
| Retail Quota | ~10% |
| BRLM | ICICI Securities, Nuvama Wealth Management, SBI Capital Markets |
| Registrar | KFin Technologies Ltd |
About Suraksha Diagnostic :
- The Company was incorporated as ‘Suraksha Diagnostic Pvt. Ltd’ in 2005, at Kolkata.
- It offers a one-stop integrated solutions for pathology, radiology testing, medical consultation services, and vaccination services.
- Company also offers omnichannel medical consultation services via online and offline modes to the customers.
- The company has presence across 12 cities and towns in the states of West Bengal, Bihar, Assam and Meghalaya
- Their diagnostics includes (a) 788 routine pathology tests, covering basic biochemistry and hematology to 664 specialized tests like advanced biochemistry, histopathology, and molecular pathology (b) 766 basic/intermediate radiology tests, including x-rays, ultrasonography ( and CT scans, 119 advanced radiology tests like MRI scans and specialized CT scans.
- Their Radiology equipment consists of 24 CT and 13 MRI machines.
- Prominent shareholders include Somnath Chatterjee, Ritu Mittal, and Satish Kumar Verma, alongside investors like OrbiMed Asia II Mauritius Ltd.
Financials :Suraksha Diagnostic IPO
| Financial Details (₹ In Cr) | 30-06-2024 | FY 24 | FY23 | FY 22 |
| Revenue from Operations | 60.73 | 218.71 | 190.13 | 223.19 |
| EBITDA as stated | 21.72 | 73.62 | 47.48 | 65.25 |
| EBITDA Margin (%) | 35.77 | 33.66 | 24.97 | 29.24 |
| PAT | 7.67 | 23.13 | 6.07 | 20.82 |
| Net Profit (%) | 12.62 | 10.57 | 3.19 | 9.33 |
| Share Capital | 8.63 | 6.9 | 6.9 | 6.9 |
| Net Worth as stated | 187.05 | 179.41 | 155.93 | 145.84 |
| NAV (₹) | 35.09 | 33.66 | 29.25 | 27.36 |
| Post issue Share Capital | 10.42 | |||
| FV | 2.0 | |||
| IPO price | 441.0 | |||
| EPS Fy24 | 4.4 | |||
| PE | 99.3 | |||
| EPS Fy25 (annualized) | 5.9 | |||
| PE (annualized) | 74.9 | |||
| Market cap in cr. | 2,298 | |||
| Market cap / Sales | 10.51 |
Anchor:Suraksha Diagnostic IPO
The anchor investors in Suraksha Diagnostic’s IPO comprises Carnelian Bharat Amritkaal Fund, Societe Generale, Integrated Core Strategies (Asia), Troo Capital, Tusk Investments and seven mutual funds like Aditya Birla Sunlife MF, Bandhan MF, JM Financial, Kotak MF, Mirae Asset MF, Nippon MF and Quant MF. 67.36 per cent of the allocation to anchor investors was allocated to seven domestic mutual funds through a total of 11 schemes.
Salient Points: Suraksha Diagnostic IPO
- Outlook for the diagnostic industry in India is positive, led by growing healthcare awareness and a higher disposable income.
- Issue is purely OFS.
- 56% of OFS comprises sale by PE OrbiMed, with their 33% holding dropping to 13%
- Rest of the OFS is by 3 promoters & extended promoters.
- Promoters and promoter group hold 61.07% stake pre-offer. Their post-IPO shareholding will drop to 48.78%.
- They derived 53% of its revenue from pathology and 46% from radiology for FY24.
- Suraksha’s FY24 revenue jumped by 15% YoY to Rs. 219 cr, . It clocked 33% EBITDA margin and net margin of 11%.
- The company’s net debt to equity ratio stood at 0.20 x for FY2024.
- Listed peers are better placed and much larger even as PE ratio may be comparable, they have higher revenues, margins & spreads. Dr Lal PathLabs traded at a P/E of 63, Metropolis Healthcare trades at P/E of 73, Vijaya Diagnostic trades at P/E of 88.
- Ability of company to go beyond West Bengal has not been established. In past they shut some centres in NCR and more than 60% of revenues come from two district’s of WB.
- I intend to skip Suraksha Diagnostic IPO. Pure OFS offers little comfort. Promoter stake will be below 50%. Valuation wrt. peers is not comforting even as outlook for the diagnostic industry is positive. When PE investors make a exit many times they tend to extract full price as may be the case here.
- GMP as reported in media is NIL.
- 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.