Entero Healthcare Solutions IPO day 2: Check GMP, subscription status, review, key dates, more. Should you subscribe?

Entero Healthcare Solutions IPO opened for subscription on Friday, February 09, and will close on Tuesday, February 13. The Entero Healthcare IPO hoped to get by on day two with some positive response from retail investors but was not successful.

The Entero Healthcare IPO was struggling to get through in its first day, competing with the other three IPOs. Not much enthusiasm was expressed by the retail investors, and there was very little response from non-institutional investors. Entero Healthcare Solutions IPO subscription status was 10%.

Also Read: Entero Healthcare Solutions IPO opens today. GMP, subscription status, review, other details. Apply or not?

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Entero Healthcare Solutions IPO has reserved not less than 75% of the shares in the public issue for qualified institutional buyers (QIB), not more than 15% for non-institutional Institutional Investors (NII), and not more than 10% of the offer is reserved for retail investors. The employee portion has been reserved equity shares worth up to ₹8 crore, and a discount of ₹119 per equity share is being offered to eligible employees bidding in the employee reservation portion.

Entero Healthcare Solutions IPO raised ₹716 crore from 25 anchor investors at the upper price band of ₹1,258 per equity share.

Also Read: Entero Healthcare Solutions IPO: Price band set at ₹1,195-1,258 apiece; check issue details, key dates, more

Entero Healthcare Solutions IPO subscription status

On day 2, Entero Healthcare Solutions IPO subscription status was 19%. Entero Healthcare IPO retail investors portion was subscribed 88%, Non Institutional Investors (NII) portion was booked 9%, and Qualified Institutional Buyers (QIB) portion is yet to be booked. The employee portion was subscribed 77%.

Also Read: Entero Healthcare IPO: Issue receives tepid response from investors on Day 01; Check GMP, Entero IPO subscription status

Entero Healthcare Solutions IPO details

Entero Healthcare Solutions IPO, which is worth ₹1,600 crore, comprises a fresh issue of ₹1000 crore, and an offer-for-sale (OFS) of up to 4,769,475 equity shares by the promoters and other investors aggregating up to ₹600 crore.

The promoters selling shareholders are Prabhat Agrawal, Prem Sethi, and OrbiMed Asia III Mauritius Limited. The biggest shareholder to sell is OrbiMed Asia III Mauritius Limited, which is offloading 3,815,580 equity shares. Prabhat Agrawal and Prem Sethi will sell 470,210 and 313,472 equity shares, respectively. Additional shareholders that are selling their shares include Novacare Drug Specialities Private Limited, which is selling up to 42,250 equity shares, and K.E. Prakash, who is selling up to 39,610 equity shares.

The company intends to use the net proceeds from the fresh offering to finance the following goals: financing the company's long-term working capital needs for Fiscal Years 2025 and 2026; pursuing inorganic growth initiatives through acquisitions; and general corporate purposes. Repayment or prepayment of certain borrowings that the company has taken out may be done in full or in part.

The Entero Healthcare Solutions IPO's book running lead managers are ICICI Securities Limited, Dam Capital Advisors Ltd (formerly Idfc Securities Ltd), Jefferies India Private Limited, JM Financial Limited, and SBI Capital Markets Limited. The issue's registrar is Link Intime India Private Ltd.

Also Read: Entero Healthcare Solutions IPO: From financials to key risks, here are 10 key things to know from RHP

Entero Healthcare Solutions IPO GMP today

Entero Healthcare Solutions IPO GMP or grey market premium is +20. This indicates Entero Healthcare share price were trading at a premium of ₹20 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, Entero Healthcare Solutions IPO expected listing price was ₹1,278 apiece, which is 1.59% higher than the IPO price of ₹1,258.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Also Read: Entero Healthcare Solutions IPO: Firm mobilises ₹716 crore from anchor investors ahead of issue

Entero Healthcare Solutions IPO Review

Swastika Investmart Ltd

According to the brokerage, Entero Healthcare Solutions Limited is a medical supply distributor in India. The technology-driven platform of the organisation facilitates the procurement of healthcare supplies for pharmacies, hospitals, and clinics throughout India. Entero Healthcare Solutions is connected to more than 1,900 healthcare product manufacturers and has access to approximately 64,500 product stock-keeping units.

"However, the company has lost money in the last three fiscal years due to negative cash flows from financing, investing, and operating activities. Additionally, the company's operations demand a large amount of working capital.

As it has been at a loss, we cannot define its P/E valuation. However, due to its current financial condition and other risk factors, we will avoid this IPO," said Shivani Nyati, Head of Wealth, Swastika Investmart Ltd.

Dilip Davda

According to Davda, a contributing editor at Chittorgarh.com, the company is one of the leading and fastest growing healthcare product distributor in India. Entero Healthcare Solutions marked losses for FY21 to FY23 and turned the corner for H1 of FY24.

“Based on annualised FY24 earnings, the issue appears aggressively priced, discounting all near term positives. Well-informed/risk seeker/cash surplus investors may park funds for the long term reward as it holds prospects going forward,” said Dilip.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.