The Suraksha Diagnostic IPO opens for subscription on November 29, 2024, and will close on December 3, 2024. The offering, totaling ₹846.24 Crores, is an Offer for Sale of 191.89 lakh shares by existing shareholders. The price band for the IPO is set between ₹420 to ₹441 per equity share, and the lot size is 34 shares, with a minimum retail investment of ₹14,994. The listing date is expected to be on or around December 6, 2024, with shares to be listed on both the BSE and NSE.

Suraksha Diagnostic, established in 1992, operates comprehensive pathology and radiology services in Kolkata, and has a strong foothold in the east Indian and north-eastern Indian markets. The company’s dominant position in these regions, bolstered by its extensive network and reputation for high-quality diagnostic services, positions it well for future growth. The core geographical focus on Kolkata and the surrounding areas supports Suraksha’s ability to capitalize on the growing demand for organized diagnostic chains in India.

The financial performance of Suraksha Diagnostic in recent years shows a mixed picture. For the fiscal year FY24, the company reported revenues of ₹2,222.60 million, which is a decline from ₹2,257.68 million in FY23. The EBITDA for FY24 was ₹728.39 million, a significant increase from ₹474.79 million in FY23, but it still lags behind the FY22 figures of ₹652.53 million. Profit after Tax (PAT) for FY24 stood at ₹231.27 million, showing growth compared to the previous fiscal’s ₹208.24 million.

The Suraksha Diagnostic IPO offers a pre-issue EPS of ₹4.43, with a post-issue EPS of ₹0.44. The pre-issue P/E ratio stands at a high 99.55x, and the post-issue P/E ratio skyrockets to 999.33x. For comparison, the industry P/E ratio is 79.65x, making the IPO significantly overpriced at current valuation levels. This raises concerns about the potential for short-term listing gains or long-term investment returns.

The Upcoming IPOs in this week and coming weeks are Property Share REIT, Rosmerta Digital, Avanse Financial and Nisus Finance.

The Current active IPO is Ganesh Infraworld, Suraksha Diagnostic, Agarwal Toughened, Apex Ecotech, Abha Power and Steel.

Additionally, the Grey Market Premium (GMP) for Suraksha Diagnostic IPO is reported to be ₹0, indicating no expected premium on the listing day. The GMP is an unorganized market indicator, and no real price discovery occurs before the official listing on the stock exchanges. Given the IPO’s high valuation and low GMP, experts advise caution, particularly for investors seeking listing gains.

The primary purpose of the IPO is for the Selling Shareholders to offload their shares, as Suraksha Diagnostic will not receive any proceeds from the offering. The company's growth and profitability prospects are reliant on continuing to capture a larger share of the expanding diagnostic market in eastern India.

In terms of investment recommendations, Suraksha Diagnostic IPO appears to be fully priced, with a post-issue P/E that is considerably higher than the industry average. Investors looking for short-term listing gains or long-term growth potential may want to reconsider due to the high valuation. The market conditions and lack of visible premium further suggest that this IPO may not deliver the returns investors are seeking.

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