One of the main reasons for this subdued show is due to the IPO structure, which is completely an offer-for-sale (OFS) of 1.92 crore shares. This means that the company will not receive any proceeds from the offering and the entire funds will go to the selling shareholders.
Suraksha Diagnostic IPO: GMP today
In line with the poor investor response for the IPO, the GMP of Suraksha Diagnostic is also Rs 0 in the grey markets, which indicates a premium of 0% over the issue price.
Suraksha Diagnostic IPO: Allotment and Listing Date
The share allotment for Suraksha Diagnostic IPO will be finalised on December 4 and the listing is scheduled for December 6.
Suraksha Diagnostic IPO: Price band
Suraksha Diagnostic has fixed a price band of Rs 420-441 per share, where investors can bid for 34 shares in one lot and in multiples thereafter.
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Suraksha Diagnostic IPO review
Most analysts have recommended avoiding the IPO, citing its high valuation and the fact that it is a complete offer for sale (OFS). Additionally, the diagnostic sector’s competitive nature and the company’s limited geographical presence have raised concerns.
Brokerage firm Anand Rathi highlighted that the company’s operations are concentrated in eastern India, restricting its market scope. “We believe the issue is overpriced and recommend avoiding the IPO,” the firm stated.
Swastika Investmart echoed similar sentiments, pointing out the aggressive valuation. “The IPO is a complete offer for sale. Valuation appears aggressively high. Investors exploring this sector may find better opportunities among other listed players, making it advisable to avoid this IPO for now,” the firm noted.
About Suraksha Diagnostic
Suraksha Diagnostic, headquartered in East India, is the region’s largest integrated diagnostic chain by operating income as of FY23. It provides comprehensive diagnostic solutions, including pathology, radiology, and medical consultations.
As of March 31, 2024, its network comprises a flagship central reference laboratory, 8 satellite labs, and 194 customer touchpoints, including 48 diagnostic centers and 146 franchised sample collection centers spread across West Bengal, Bihar, Assam, and Meghalaya.
In FY24, Suraksha conducted about 5.98 million tests, serving around 1.14 million patients. Its revenue for the year grew to Rs 219 crore, up from Rs 190 crore in FY23, with profit after tax surging to Rs 23 crore.
According to CRISIL, India’s diagnostics market, valued at Rs 86,000-87,000 crore in FY24, is expected to grow at a 10%-12% CAGR, reaching Rs 1,27,500-1,37,500 crore by FY28.
The equity shares of Suraksha Diagnostic will be listed on BSE and NSE, with ICICI Securities, Nuvama Wealth Management, and SBI Capital Markets serving as the book-running lead managers for the issue.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
