Laxmi Dental IPO - Should You Subscribe? Read Anand Rathi's Analysis

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Anand Rathi Report

Laxmi Dental Ltd. will launch its initial public offering on January 13 and the offer closes for subscription on Jan. 15. India’s only end-to-end integrated dental product company has fixed the price band in the range of Rs 407 to 428 per share. The minimum order lot for bidding is 33.

The Rs 698.06 crore IPO consists of a fresh issue of 32 lakh shares worth Rs 138 crore and an offer-for-sale of 1.31 lakh shares totalling Rs 560.06 crore.

Objects of the Issue

• Repayment/prepayment, of certain outstanding borrowings by the Company.

• Funding the capital expenditure requirements for purchasing new machinery for the Company.

• Investment in our subsidiary, Bizdent Devices Private Limited, is needed for Capex requirements for the purchase of new machinery. 

• General corporate purposes.

Valuation and outlook

Laxmi Dental is one of the leading company offering comprehensive portfolio of dental products globally. Its offerings include custom-made crowns and bridges, branded dental products such as clear aligners, thermoforming sheets and aligner related products as a part of aligner solutions, and paediatric dental products.

The company is among the few vertically integrated players globally and the only vertically integrated company in India as of Sep-24 On valuation parse at the upper band of Rs 428/-, the issue is asking for a market cap of Rs 23,522 million and based on FY25 annualised earnings, the company is asking a PE of 64.6x times which is aggressively priced.

The company ranks among the top two dental laboratories in India by revenue and is the leading exporter of dental products. We believe that going forward company’s growth factor could be driven by trends such as the changing regulatory requirements in the medical devices sector helps transition from unorganised to organised players, increasing awareness and demand for dental aesthetics, and the growing preference for metal free dental products.

Hence considering all parameters, we recommend the issue can be consider as “Subscribe for Long-term”.

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