Suraksha Diagnostic IPO Fully Subscribed On Final Day, QIBs Lead Demand

Suraksha Diagnostic Ltd.'s initial public offering was fully subscribed on Tuesday, which was the third and final day of the issue. As of 7:00 p.m., the IPO was subscribed 1.27 times, according to the data available on the NSE.

The demand for the public offer was led by qualified institutional investors, who booked 1.72 times the portion allotted for them. Non-institutional investors subscribed 1.41 times their allotted quota, whereas retail investors subscribed 0.95 times the portion earmarked for them.

In comparison, the demand lagged on the first two days of the IPO, as the issue was booked 0.11 times on Monday and 0.25 times on Monday.

The IPO comprised of only an offer-for-sale of 1.92 crore shares, with no fresh issuance of shares. The price band for the issue was fixed in the range of Rs 420–441 per share.

Suraksha Diagnostic IPO's grey market premium was nil, as of 12:54 p.m. on Tuesday, as per InvestorGain. Hence the estimated listing price is Rs 441, same as the upper end of the issue price.

The promoters selling their shares via the IPO include Somnath Chatterjee, Ritu Mittal and Satish Kumar Verma. Meanwhile, OrbiMed Asia II Mauritius Ltd., Munna Lal Kejriwal and Santosh Kumar Kejriwal are the investors selling their stake in the company.

• Issue opened: Nov. 29.

• Issue closes: Dec. 3.

• Issue price: Rs 420–441.

• Offer for sale: Rs 846.25 crore.

• Fresh issue: Nil.

• Total issue size: Rs 846.25 crore.

• Lot size: Minimum 34 shares, and then in multiples thereof.

Since the Suraksha Diagnostic IPO is entirely an OFS issue, proceeds from the offer will go directly to the selling shareholders.

Incorporated in 2005, Suraksha Diagnostic is a diagnostic chain in Eastern India, providing a wide range of medical testing services like pathology, radiology testing and medical consultancy services.

The company has a central reference laboratory with eight satellite laboratories and 215 customer touchpoints. This includes 49 diagnostic centres, and 166 sample collection centres as of June 2024. The company has its presence spread across West Bengal, Bihar, Assam, and Meghalaya. As of fiscal 2024, the market share of the company in its major market, the eastern part of the country, stood at 1.15–1.30%.

In fiscal 2024, the diagnostic company conducted around 5.98 million tests, which served 1.14 million patients.

While Suraksha Diagnostic's revenue growth over the past few years has remained muted, the company's margins have expanded from 28% in fiscal 2022 to 32% in fiscal 2024. The company's net profit has grown at a 5.4% compounded annual growth rate over FY22-24.

The company did see a substantial decrease in revenues and profits in FY23. However, this was in line with overall industry performance. As per the company's red herring prospectus, profitability of diagnostic centres across India contracted in FY23, and remained range bound in FY24, due to higher investment in digitisation and direct acquisition of customers.

The IPO was fully subscribed 1.27 times, as of 07:00 p.m. on Tuesday.

• Qualified institutional buyers: 1.74 times.

• Non-institutional investors: 1.41 times

• Retail investors: 0.95 times, or 95%.

Suraksha Diagnostic IPO's grey market premium was nil, as of 12:54 p.m. on Tuesday, as per InvestorGain. Hence the estimated listing price is Rs 441, same as the IPO price.

However, GMP is not an official price quote for the stock and is based on speculation. 

Disclaimer: Investments in initial public offerings are subject to market risks. Please consult with financial advisors and read red herring prospectus thoroughly before placing bids.