Suraksha Diagnostic Limited, a prominent player in the diagnostics industry in Eastern and Northeastern India, is set to launch its IPO on November 29, 2024, with a closing date of December 3, 2024. This book-built issue of ₹846.25 crores is entirely an Offer for Sale (OFS) comprising 1.92 crore equity shares. Below, we break down the IPO details, company overview, and financial highlights in a concise blog format.

IPO Details at a Glance

• IPO Date: November 29 to December 3, 2024
• Price Band: ₹420 - ₹441 per share
• Face Value: ₹2 per share
• Minimum Lot Size: 34 shares
• Minimum Retail Investment: ₹14,994
• Listing: BSE and NSE
• Registrar: KFin Technologies Limited
• Book Running Lead Managers:
  • ICICI Securities Limited
  • Nuvama Wealth Management Limited
  • SBI Capital Markets Limited

Suraksha Diagnostic: A Brief Overview

Incorporated in 2005, Suraksha Diagnostic Limited specializes in pathology, radiology testing, and medical consultancy services. The company has carved a niche in East and Northeast India, operating through:

• 8 satellite laboratories
• 49 diagnostic centres
• 166 sample collection centres
• 215 customer touchpoints

Additionally, it utilizes advanced technological systems, including Laboratory Information Management Systems (LIMS), Radiology Information Systems (RIS), and Picture Archive Communication Systems (PACS), ensuring seamless operations and quick turnaround times.

The company is also leveraging digital pathology and artificial intelligence to deliver accurate blood tests, while radiology reports are generated via digital platforms for efficiency.

Competitive Strengths

Suraksha Diagnostic’s key strengths include:

1. Integrated Diagnostic Services: Offers pathology, radiology, and medical consultancy under one roof.
2. Advanced Infrastructure: Technologically advanced platforms like ERP, LIMS, and PACS enhance operational efficiency.
3. Focused Regional Growth: Well-positioned in East and Northeast India’s fragmented diagnostics market.
4. Experienced Management: Led by industry veterans with a deep understanding of diagnostics and healthcare.
5. Customer-Centric Approach: High-quality services ensure customer retention and brand loyalty.

IPO Timeline and Lot Size Details

• Opening Date: November 29, 2024
• Closing Date: December 3, 2024
• Allotment Finalization: December 4, 2024
• Listing Date: December 6, 2024

Investors can apply for a minimum of 34 shares per lot, translating to a minimum investment of ₹14,994. For High Net-worth Individuals (HNIs), the minimum lot size is 14 lots, amounting to ₹2,09,916.

Financial Performance

Suraksha Diagnostic has shown consistent growth over the years, with notable financial highlights:

Key metrics for FY24 include:

• Return on Equity (ROE): 14.09%
• Return on Capital Employed (ROCE): 21.46%
• Debt/Equity Ratio: 0.2
• PAT Margin: 10.57%

The company’s financials suggest robust profitability and a focus on expansion, making it an attractive prospect for long-term investors.

IPO Objectives

The IPO is purely an Offer for Sale, meaning the proceeds will go to the selling shareholders. The company will not receive any funds from this issue.

Peer Comparison

Suraksha Diagnostic operates in a competitive market alongside established players. With a post-IPO P/E ratio of 99.31x, the issue appears fully priced compared to industry benchmarks. However, its regional dominance and technological advancements could support long-term growth.

Expert Reviews and Recommendations

• According to market experts, the IPO is fully priced, factoring in near-term positives.
• While short-term gains may be limited, the company’s growth potential and regional focus make it a viable option for long-term investors.

Should You Invest?

Suraksha Diagnostic Limited is a promising diagnostics provider with a stronghold in East and Northeast India. However, potential investors should evaluate:

1. Growth Potential: Expansion into other regions and scaling operations could unlock value.
2. Financial Health: Strong metrics like ROCE and PAT margins indicate solid fundamentals.
3. Valuation: Fully priced at the upper end of the price band.

For well-informed investors with a long-term horizon, this IPO could be a strategic addition to their portfolio. Always conduct due diligence or consult a financial advisor before investing.

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