Laxmi Dental IPO: Key Highlights for Investors as Grey Market Premium Soars

Vijay Singh
4 Min Read

The much-anticipated initial public offering (IPO) of Laxmi Dental Limited has opened for bidding today, 13 January 2025, and will remain available until Wednesday, 15 January 2025. This IPO is expected to make waves in the financial market as it seeks to raise an impressive ₹698.06 crore. Here are all the critical details potential investors need to know:

Laxmi Dental IPO Price Band and Subscription Period

  • IPO Price Band: ₹407 to ₹428 per equity share.
  • Bidding Window: Open from Monday, 13 January 2025, to 5:00 PM on Wednesday, 15 January 2025.
  • Lot Size: Investors can bid in lots, with each lot comprising 33 equity shares.

Fundraising Breakdown

The total issue size of ₹698.06 crore includes:

  • Fresh Share Issuance: ₹138 crore.
  • Offer for Sale (OFS): ₹560.06 crore, reserved for existing shareholders.

Grey Market Premium (GMP)

Before the IPO’s opening, Laxmi Dental’s shares are commanding a ₹161 premium in the grey market today. This strong GMP suggests significant investor interest in the IPO, indicating potential listing gains.

Lead Managers and Registrar Details

  • Registrar: Link Intime India Private Limited.
  • Lead Managers: Nuvama Wealth Management, Motilal Oswal Investment Advisors, and SBI Capital Markets.

Important Dates to Remember

  • Allotment Date: 16 January 2025 (tentative).
  • Listing Date: 20 January 2025, on both the BSE and NSE.

Financial Growth and Valuation Metrics

Laxmi Dental has showcased robust financial growth over recent years:

  • Revenue CAGR: 18.9% (FY2022-24).
  • EBITDA CAGR: 109.6% (FY2022-24).
  • Profit Margins: Improved from 4.0% in FY2022 to 19.5% in H1FY2025.
  • Market Capitalization: Estimated at ₹2,352.38 crore post-IPO.

Despite a high price-to-earnings (P/E) ratio of 89.2x at the upper price band based on FY2024 earnings, analysts remain optimistic due to the company’s strong operational efficiencies and future growth potential.

Analyst Recommendations

Positive Indicators:

  • Laxmi Dental is India’s only end-to-end integrated dental product company, operating in a niche and growing market segment.
  • The company has reduced interest costs following debt repayment, improving profitability metrics.
  • Increased awareness of dental aesthetics and a shift toward organized dental solutions are expected to fuel growth.

Concerns:

  • The OFS portion forms a significant 80% of the issue size, raising questions for new investors.
  • The IPO valuation appears aggressive compared to industry peers.

Expert Verdicts:

  1. Prathamesh Masdekar (StoxBox): Recommends a SUBSCRIBE rating, citing operational efficiencies and promising growth in the organized dental solutions space.
  2. Rajan Shinde (Mehta Equities): Advises risk-taking investors to subscribe for a long-term perspective, highlighting the company’s innovative B2B2C model and niche market positioning.

Anchor Investors and Financial Metrics

Ahead of the IPO opening, the company raised ₹314.13 crore from anchor investors, reflecting strong institutional demand. Key financial highlights include:

  • Assets Growth: From ₹96.54 crore in FY24 to ₹134.52 crore.
  • Revenue Increase: From ₹163.84 crore in FY24 to ₹195.26 crore.
  • Net Worth and PAT: Recorded significant year-on-year growth.
  • Borrowings: A notable increase was also observed during this period.

Laxmi Dental IPO presents an exciting opportunity for investors, given its strong financial performance, niche market positioning, and promising growth potential in the dental solutions industry. With a high grey market premium and solid backing from anchor investors, this IPO has captured market attention. Investors are advised to evaluate their risk appetite and investment horizon before subscribing to this public issue.

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