As of December 3, 2024, the Suraksha Diagnostic IPO has garnered attention from investors, with a subscription rate of 25% over the first two days of bidding. The retail investor category has shown a stronger interest, being booked at 45%, while the Non-Institutional Investors (NIIs) category has only reached 13%.
IPO Details: Price Band and Lot Size
Suraksha Diagnostic has set a price band of ₹420 to ₹441 per share. Investors can bid for 34 shares in one lot, with the option to apply for multiple lots thereafter.
- Price Band: ₹420 – ₹441
- Lot Size: 34 shares
Grey Market Premium (GMP)
Reflecting weak investor interest, the grey market premium (GMP) for Suraksha Diagnostic stands at ₹0, indicating no premium over the issue price. This lack of demand in the grey market suggests caution among potential investors.
IPO Structure and Financial Performance
Offer for Sale (OFS)
The Suraksha Diagnostic IPO is entirely an Offer for Sale (OFS) of 1.91 crore shares, meaning that the company will not receive any proceeds from this IPO; all funds will go to the selling shareholders. This structure has contributed to the lukewarm response from investors.
Financial Performance
In terms of financial performance, Suraksha Diagnostic reported total income figures of ₹225 crore, ₹193 crore, and ₹222 crore over the last three fiscal years (FY22-FY24). The company averaged an earnings per share (EPS) of ₹3.27 and a return on net worth (RoNW) of 11.05% during this period.
Valuation Insights: Pricing Analysis
If we annualize FY25 earnings based on the post-IPO fully diluted equity base, the asking price reflects a price-to-earnings (P/E) ratio of 74.87. Based on FY24 earnings, this P/E stands at 99.32, indicating that the IPO is fully priced.
Analyst Recommendations
Analysts have expressed concerns regarding the valuation and market scope of Suraksha Diagnostic. Swastika Investmart has noted that the valuation appears aggressively high and suggests that investors may find better opportunities among other listed players. Anand Rathi has also recommended avoiding this IPO due to its limited operational geography in eastern India.
Important Dates
- Share Allotment Date: December 4, 2024
- Listing Date: December 6, 2024
Conclusion
The Suraksha Diagnostic IPO presents a cautious investment opportunity given its current subscription status and pricing concerns. With no premium in the grey market and an entirely OFS structure, potential investors should carefully consider their options before participating in this IPO.
Disclaimer: This article is for informational purposes only and does not constitute financial advice or recommendations regarding stock purchases. Readers should conduct their own research or consult with financial advisors before making investment decisions related to any stocks mentioned herein.
