Shares of Star Imaging and Path Lab Limited made a muted debut on the BSE SME platform on 18 August 2025, opening at ₹142, which is exactly the same as the issue price, showing no immediate listing gain despite the strong response during the subscription period. Nevertheless, market participants consider the flat listing to be fair given the premium valuation and healthy fundamentals of the company.

The ₹69.46 crore IPO comprised both a fresh issue of 39.20 lakh shares (₹55.66 crore) and an offer for sale of 9.72 lakh shares (₹13.80 crore). The offer was subscribed 5.67 times overall, with QIBs bidding 12.85x, Non-Institutional Investors at 6.23x and Retail Category at 3.37x.

Star Imaging plans to deploy the net proceeds toward:

• Working capital requirements (₹25 crore)
• Purchase of refurbished medical equipment (₹5.14 crore)
• Repayment/prepayment of certain borrowings (₹15 crore)
• General corporate purposes and issue expenses

Star Imaging Path Lab is a NABL-accredited diagnostics company offering radiology, pathology, cardiology and neurology services across Delhi, Uttar Pradesh and Nashik via 23 operational centres, 19 of which operate under Public Private Partnership (PPP) arrangements with state governments and municipal bodies. The company’s B2C hub in Tilak Nagar and 40 empanelled private hospital partnerships further strengthen its presence in the NCR region.

Financially, the company recorded a 28% year-on-year rise in net profit for FY25 following strong operating leverage, cost optimisation and the closure of underperforming centres. EBITDA margin expanded from 9.95% in FY23 to over 28% in FY24, underscoring improved efficiency and increasing contribution from higher-margin radiology services.

However, investors should note that the company is regionally concentrated, with 100% of FY25 operating revenue derived from Delhi and Uttar Pradesh. In addition, significant dependence on third-party PPP contracts and on medical equipment suppliers presents operational and renewal-related risks.

The flat listing likely reflects a combination of already priced-in valuations and short-term profit booking by IPO applicants. Over the medium term, investors will look for Star Imaging to expand its network into tier-II and tier-III cities and grow its specialized diagnostics portfolio (molecular testing, genomics, preventive health care), as outlined in its post-IPO strategy.

The counter will now be watched for sustained demand in the SME segment as broader healthcare and diagnostics themes continue to draw investor interest in the Indian capital markets.

The Upcoming IPOs in this week and coming weeks are Mangal Electrical Industries, LGT Business Connextions, Vikram Solar, Gem Aromatics, Studio LSD, Shreeji Shipping Global, Patel Retail.

The Current active IPO are Regaal Resources, Mahendra Realtors and Infrastructure.

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