Chandan Healthcare Limited is set to launch its IPO in February 2025. Known for its high-quality diagnostic services, Chandan Healthcare operates over 50 centres and 500 collection centres across Uttar Pradesh and Uttarakhand, serving a vast customer base with international-standard services. The company aims to raise ₹107.36 Crores through a Book Built Issue, comprising a Fresh Issue of 44.52 Lakh shares worth ₹70.78 Crores and an Offer for Sale (OFS) of 22.99 Lakh shares totaling ₹36.56 Crores.

The IPO will open for subscription on February 10, 2025, and close on February 12, 2025. The allotment is expected to be finalized on February 13, 2025, with a tentative listing date of February 17, 2025 on the NSE SME platform. The price band for the IPO has been set between ₹151 and ₹159 per share.

Market Capitalization and Lot Size

At the higher price of ₹159, the market capitalization of Chandan Healthcare Limited will be ₹388.78 Crores. The lot size for the IPO is 800 shares, and retail investors are required to invest a minimum of ₹1,27,200. For High-Net-Worth Individuals (HNIs), the minimum investment is ₹2,54,400 (2 lots of 1,600 shares).

Grey Market Premium (GMP)

The Grey Market Premium for Chandan Healthcare IPO is currently reported to be ₹23, which indicates a 14.46% potential gain over the issue price. It is important to note that GMP is based on unregulated trading before listing and can vary significantly. GMP is not a guaranteed indicator of post-issue performance but serves as an informational tool.

Financial Performance and Valuation

For the period ending December 31, 2024, Chandan Healthcare reported revenues of ₹16,798.82 Lakhs, up from ₹13,702.92 Lakhs in 2022. The EBITDA for the same period was ₹3,073.40 Lakhs, and the Profit After Tax (PAT) for FY24 stood at ₹1,741.99 Lakhs, reflecting a steady growth trajectory. The company has posted significant improvements in financial metrics, with the pre-issue EPS standing at ₹8.14, which decreases to ₹6.66 post-issue due to the new share issuance.

The P/E ratio for Chandan Healthcare IPO is set at 19.53x pre-issue and 23.89x post-issue, which compares favorably to the industry average of 75x. Additionally, the Return on Capital Employed (ROCE) stands at 35.20%, and the Return on Equity (ROE) is at an impressive 47.50%, reflecting the company’s efficient operations and strong financial health.

IPO Objectives

The net proceeds from the IPO will be utilized as follows:

1. ₹3,281.58 Lakhs for the setup of a new Flagship Diagnostic Centre in Jankipuram, Lucknow.
2. ₹710.23 Lakhs for the establishment of a Central Reference Laboratory in Ayodhya.
3. ₹710.11 Lakhs for the development of a new Central Reference Laboratory in Ashiyana, Lucknow.
4. The remaining funds will be used for general corporate purposes.

IPO Allotment Process

Investors can check the allotment status for Chandan Healthcare IPO on February 13, 2025. The steps to check your allotment status are as follows:

• Visit the Registrar’s website.
• Select Chandan Healthcare Limited IPO from the list of IPOs.
• Enter your application number, PAN, or DP Client ID.
• Submit the details to find your allotment status.

Chandan Healthcare IPO Review and Investment Recommendation

Chandan Healthcare offers a promising investment opportunity based on its consistent growth and the expansion plans funded through the IPO proceeds. With a competitive P/E ratio of 19.53x, the IPO is considered fairly priced compared to the industry. The GMP of ₹23 suggests a positive market sentiment, although, as always, the final listing performance may vary.

This IPO could be a good choice for risk-tolerant investors looking for listing gains, but investors should remain cautious due to the speculative nature of GMP and market fluctuations. Those seeking long-term exposure to the healthcare and diagnostics sector may also find this IPO appealing due to Chandan Healthcare’s established presence and growth trajectory.

The Upcoming IPOs in this week and coming weeks are Eleganz Interiors, PS Raj Steels, Chandan Healthcare, Ajax Engineering, Hexaware Technologies.

The Current active IPO are Readymix Construction, Solarium Green, Ken Enterprises, Amwill Healthcare,Chamunda Electricals.

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