Suraksha Diagnostic, a renowned name in Kolkata's diagnostic services industry, has come up with an IPO offering worth ₹846.24 Crores. This IPO, which consists entirely of an Offer for Sale of 191.89 Lakh Shares, is expected to attract attention due to its established brand presence and the growth potential in the eastern and north-eastern Indian markets.

The Growth of Suraksha Diagnostic in Kolkata and Beyond

Established in 1992, Suraksha Diagnostic offers an array of comprehensive pathology and radiology services under one roof. The company’s extensive network, reputation for quality diagnostics, and strategic positioning in East India make it a prime contender for future growth in the rapidly expanding diagnostic services sector. With Kolkata as its base, Suraksha aims to expand its reach to adjacent regions in the east and north-east, capitalizing on the ongoing shift towards organized diagnostic chains in these areas.

This IPO marks an important milestone for the company, which has built a solid track record in the market. The revenue from operations for fiscal years 2022 to 2024 reflects a steady growth trajectory, despite fluctuations in quarterly performance. As of the first quarter of fiscal 2024, the company's revenue stood at ₹618.49 Million, with EBITDA of ₹217.21 Million and a profit after tax (PAT) of ₹76.67 Million.

Suraksha Diagnostic IPO: Subscription and Key Details

The Suraksha Diagnostic IPO, which opened on November 29, 2024, and closed on December 3, 2024, has already attracted significant attention. By the final day of subscription, the IPO was subscribed 1.26 times, indicating a healthy demand from retail and institutional investors alike.

The issue price for the IPO has been set between ₹420 and ₹441 per equity share. With a market capitalization of ₹2,296.76 Crores at the upper price band of ₹441, the IPO presents an intriguing investment opportunity, although the company’s valuation appears to be fully priced based on its P/E ratio. For retail investors, the lot size is 34 shares, and the minimum investment required is ₹14,994. High-net-worth individuals (HNIs) need to apply for a minimum of 14 lots, amounting to ₹2,09,916.

The P/E ratio at the upper price band is 99.93x, which is considerably higher than the industry average of 79.65x. While this suggests that Suraksha Diagnostic may be overvalued for those seeking listing gains or long-term investment opportunities, the company’s strong market presence in East India is a positive factor for long-term growth.

Grey Market Premium and Allotment Status

The Grey Market Premium (GMP) of Suraksha Diagnostic IPO is currently pegged at ₹0, indicating that there are no immediate listing gains expected from the offer. This reflects a somewhat cautious approach from investors, as the company’s financials and valuation may not present an immediate upside potential. It's important to note that GMP is not an official market indicator, and its fluctuation is largely driven by demand and supply dynamics in the unorganized grey market.

Investors looking to track their allotment status can do so through the registrar’s website. The IPO allotment date is set for December 4, 2024, and investors can check their status by entering their application number or PAN details. The shares are expected to be listed on both the BSE and NSE by December 6, 2024.

Financial Performance and Future Prospects

Suraksha Diagnostic has shown strong operational metrics, including a Return on Capital Employed (ROCE) of 21.46% and Return on Equity (RoE) of 14.09% for FY24. These metrics reflect a solid business model and efficient capital management. However, given the IPO’s fully priced nature, potential investors should approach with caution if seeking short-term gains.

The company’s revenue growth, however, is somewhat volatile, with a slight dip in fiscal 2023, followed by a rebound in fiscal 2024. This indicates that Suraksha Diagnostic is still navigating through market dynamics in its core geography.

The Upcoming IPOs in this week and coming weeks are Dhanlaxmi Corp, Jungle Camps, Toss The Coin, Purple United, Rosmerta Digital and Avanse Financial.

The Current active IPO is Nisus Finance and Emerald Tyre Manufacturers.

Conclusion: Is Suraksha Diagnostic IPO Worth It?

Considering the company’s established brand, market positioning in East India, and strong operational metrics, Suraksha Diagnostic may hold long-term potential, particularly in the fast-growing diagnostic services sector. However, given the high valuation and lack of immediate listing gains, this IPO is not recommended for those seeking short-term profits.

For those interested in long-term investment opportunities in the Indian healthcare space, Suraksha Diagnostic’s IPO may still offer value. However, investors should closely monitor market trends and be cautious due to the fully priced nature of the IPO.

For more detailed updates on IPO news and stock market insights, be sure to visit our Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today - Finance Saathi and explore the latest trends in Share Market and business updates at Top News Headlines - Share Market News, Latest IPO News, Business News, Economy News- Finance Saathi.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst & Finance Saathi Telegram Channel for Regular Share Market, News & IPO Updates.

Start your Stock Market Journey and Apply in IPO by Opening a Free Demat Account in Choice Broking FinX.