Suraksha Diagnostic IPO: Should You Subscribe?

The IPO of Suraksha Diagnostic Limited, aiming to raise ₹846.25 crore, opened for subscription on November 29, 2024. The response has been tepid so far, with a subscription rate of 0.11 times by the end of Day 1.

Key Details of the IPO:

• Price Band: ₹420-₹441 per share
• Lot Size: Minimum 34 shares
• Smallest Retail Investment: ₹14,994 (at the upper price band)
• Subscription Closing Date: December 3, 2024
• Listing Date: December 6, 2024 (BSE and NSE)

Day 1 Subscription Highlights:

Retail investors subscribed to 20% of their allocation.

• Non-Institutional Investors (NII): 4% subscription.
• No participation from Qualified Institutional Buyers (QIBs).

For small NIIs, the minimum investment is ₹209,916 (14 lots or 476 shares), while larger NIIs must invest ₹1,004,598 (67 lots or 2,278 shares).

Grey Market Premium (GMP):

The latest GMP for the IPO, as of December 2, 2024, is ₹0. This indicates no premium or discount over the upper price band of ₹441. The estimated listing price is expected to be ₹441, suggesting a neutral return.

Structure and Use of Proceeds:

This IPO is entirely an Offer for Sale (OFS), meaning the proceeds will go to existing shareholders. Suraksha Diagnostic will not directly benefit from the raised funds.

About Suraksha Diagnostic Limited:

Founded in 2005, the company offers a wide range of healthcare services, including pathology, radiology, and medical consultations. It operates a central reference lab, 8 satellite labs, and 215 customer touchpoints (as of June 30, 2024).

Key operational highlights:

• Strong presence in eastern India (West Bengal, Bihar, Assam, and Meghalaya).
• Operates 44 diagnostic centres with 120 polyclinics and a network of over 750 doctors.

Conclusion:

Given the lukewarm response, neutral GMP, and lack of direct financial benefit to the company, potential investors should evaluate their risk appetite and consider other financial factors before subscribing.