Suraksha Diagnostic Limited, established in 1992, is a leading diagnostic service provider in Kolkata, offering a comprehensive range of pathology and radiology services under one roof. The company has a strong presence in Eastern India, particularly in Kolkata, and aims to expand its operations into the North-East Indian markets. Suraksha Diagnostic has built a reputation for delivering high-quality diagnostic services, and its dominant market position in its core geography positions it well to take advantage of the growing demand for organized diagnostic chains in the region.

The Suraksha Diagnostic IPO offers an Offer for Sale of 191.89 lakh shares amounting to ₹846.24 Crores. The subscription period for this IPO is from November 29, 2024, to December 3, 2024, with the allotment date expected to be December 4, 2024, and shares to be listed on BSE & NSE by December 6, 2024. The price band for the IPO is ₹420 to ₹441 per share, and at the upper price band, the market capitalization of Suraksha Diagnostic will be ₹2,296.76 Crores.

Suraksha Diagnostic IPO Key Details:

• The lot size for the IPO is 34 shares, with retail investors required to invest a minimum of ₹14,994. High-Net-Worth Individuals (HNIs) must invest for 14 lots, amounting to ₹2,09,916.
• The Grey Market Premium (GMP) for the IPO is ₹0, suggesting no immediate listing gains.
• ICICI Securities, Nuvama Wealth Management, and SBI Capital Markets are the book-running lead managers, and KFIN Technologies is the registrar for the issue.

Suraksha Diagnostic IPO Subscription and Allotment: As of November 29, 2024, the IPO subscription status shows a low response on its first day, with the IPO subscribed only 0.04 times. Investors can monitor the live subscription status on the BSE platform for real-time updates. The IPO allotment is expected to be finalized by December 4, 2024, and investors can check their status by entering their PAN, application number, or DP client ID on the registrar's website.

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

The Current active IPO is Ganesh Infraworld, Suraksha Diagnostic, Agarwal Toughened.

Objectives of Suraksha Diagnostic IPO: Suraksha Diagnostic will not receive any proceeds from the Offer. All proceeds from the sale of shares will go to the selling shareholders, as part of their Offer for Sale.

Company Overview and Financials: Suraksha Diagnostic has been operating successfully for over three decades and is recognized for its high-quality services. The company's revenue for the fiscal years shows fluctuating performance with revenues of ₹618.49 Million for the three months ending September 30, 2024, compared to ₹2,257.68 Million for the same period in FY2022. The company’s EBITDA also saw significant variations, standing at ₹217.21 Million in FY2024.

The Profit After Tax (PAT) for the three months ending September 30, 2024, was ₹76.67 Million, an improvement compared to ₹60.65 Million in the same period in FY2023.

Valuation and IPO Metrics: The pre-issue EPS for Suraksha Diagnostic stands at ₹4.43, and the post-issue EPS is ₹4.41. The pre-issue P/E ratio is 99.55x, while the post-issue P/E ratio is 99.93x, compared to the industry P/E ratio of 79.65x, indicating that the IPO is fully priced.

With a Return on Capital Employed (ROCE) of 21.46% and Return on Equity (RoE) of 14.09% for FY2024, Suraksha Diagnostic shows moderate profitability but faces challenges in valuation when compared to the industry standard.

Recommendation for Investors: The Suraksha Diagnostic IPO is fully priced, with the Grey Market Premium indicating no immediate listing gains. Given the company’s financial performance and valuation, we recommend that investors avoid this IPO for listing gains or long-term investment purposes. The company's high P/E ratio and fluctuating financials suggest potential risks for investors.

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