The much-anticipated debut of Suraksha Diagnostic shares on Dalal Street is set for Friday, December 6. While excitement is brewing, signals from the grey market suggest a cautious optimism. The grey market premium (GMP) for Suraksha Diagnostic shares is hovering at ₹12-15, indicating a modest 2-3% gain for investors on listing day. Interestingly, the GMP was a mere ₹2 when the IPO bidding closed, reflecting a subdued sentiment at that stage.
IPO Details and Subscription Insights
Suraksha Diagnostic’s IPO was offered in a price band of ₹420-441 per share, with a lot size of 34 shares. The issue, which opened for bidding from November 29 to December 3, raised ₹846.25 crore through an Offer for Sale (OFS) of 1,91,89,330 equity shares. Notably, the IPO was entirely an OFS, meaning the proceeds will go to the promoters and existing shareholders rather than the company.
The IPO witnessed a muted response, with an overall subscription of 1.27 times. Here’s how the different investor categories responded:
| Investor Category | Subscription Rate |
|---|---|
| Qualified Institutional Buyers (QIBs) | 1.74 times |
| Non-Institutional Investors (NIIs) | 1.41 times |
| Retail Investors | 0.95 times (undersubscribed) |
Market Sentiments and Expert Opinions
According to Shivani Nyati, Head of Wealth at Swastika Investmart, the IPO has the potential for modest gains but warrants a cautious approach. “While Suraksha Diagnostic holds a notable presence in eastern India, its financial performance has been inconsistent, especially after a setback in FY23. Though recovery is evident, the valuations remain aggressive,” Nyati said.
For investors, Nyati suggests evaluating opportunities in established diagnostics players before committing to Suraksha Diagnostic shares, given the lack of direct business benefits from the IPO proceeds.
About Suraksha Diagnostic
Established in 2005, Suraksha Diagnostic is a Kolkata-based diagnostics and pathology solutions provider. The company offers a wide range of services, including pathology, radiology testing, and medical consultancy. As of June 30, 2024, it operates:
- 1 Central Reference Laboratory
- 8 Satellite Laboratories
- 49 Diagnostic Centres
- 166 Sample Collection Points
- 215 Customer Touchpoints
The company has a strong foothold in West Bengal, Bihar, Assam, and Meghalaya.
Brokerage Views and Expectations
Brokerages have mixed reactions to the IPO. While some firms recommended subscribing to the issue, others advised skipping it due to financial performance and valuation concerns. ICICI Securities, Nuvama Wealth Management, and SBI Capital Markets acted as book-running lead managers for the IPO, with KFin Technologies serving as the registrar.
The mixed sentiments reflect the company’s struggle with financial inconsistency, particularly in FY23. Despite showing signs of recovery, experts believe the valuations are steep for a company still proving its resilience in a competitive diagnostics sector.
What to Expect on Listing Day?
The GMP hints at a small premium of ₹12-15, translating to a 2-3% gain for investors on debut. However, given the IPO’s underwhelming subscription figures, particularly from retail investors, the market’s reaction might lean on the cautious side.
Key Factors to Watch:
- Grey Market Trends: Any shift in the GMP ahead of the listing could signal changes in investor sentiment.
- Sector Performance: The diagnostics sector’s overall performance might influence Suraksha Diagnostic’s debut.
- Long-Term Prospects: Investors will keenly observe the company’s financial trajectory post-listing to assess its growth potential.
Looking Ahead
Suraksha Diagnostic’s IPO journey has been modest, and its listing day performance will be closely watched by market participants. For now, the diagnostics provider enters Dalal Street with cautious optimism. Whether it can deliver long-term value remains to be seen.