Strong Debut! Laxmi Dental shares list at ₹542 on NSE, a premium of 26.64% from IPO price
Laxmi Dental shares made a strong debut on Monday, January 20, listing at ₹542 on NSE, a massive premium of 26.64 percent over the issue price of ₹428. Meanwhile, on BSE, it debuted at ₹528, up 23.36 percent from its IPO price.
Laxmi Dental IPO listing: Laxmi Dental shares made a strong debut on Monday, January 20, listing at ₹542 on NSE, a massive premium of 26.64 percent over the issue price of ₹428. Meanwhile, on BSE, it debuted at ₹528, up 23.36 percent from its IPO price.
Laxmi Dental's initial public offering (IPO), valued at ₹698.06 crore, was open for subscription from January 13 to January 15. The IPO price band was fixed at ₹407-428 per equity share.
Following the three days of bidding, Laxmi Dental IPO closed with exceptional demand, garnering 114.14 times bids. The IPO received bids for 102.38 crore shares against 89.70 lakh shares on offer. The retail investor segment was booked 75.1 times, while the non-institutional investors (NII) category was subscribed 147.69 times. Meanwhile, the Qualified Institutional Buyers quota was bid 110.38 times in the 3 days of bidding.
About the IPO
Laxmi Dental IPO was a combination of fresh issue of 0.32 crore shares aggregating to ₹138.00 crore and offer for sale of 1.31 crore shares aggregating to ₹560.06 crore. Retail investors could apply with a minimum lot size of 33 shares, requiring a minimum investment of ₹14,124.
Laxmi Dental raised ₹314.13 crore from anchor investors ahead of the IPO on January 10, 2024.
The company intends to use the net proceeds from the Fresh Issue to repay or prepay outstanding borrowings, invest in subsidiaries to address their debt, and fund capital expenditure for new machinery. It also plans to allocate funds to its subsidiary, Bizdent Devices Private Limited, for similar machinery investments, along with meeting general corporate purposes.
Nuvama Wealth Management Limited, Motilal Oswal Investment Advisors Limited, SBI Capital Markets Limited are the book running lead managers of the Laxmi Dental IPO, while Link Intime India Private Ltd is the registrar for the issue.
Review
Brokerages have recommended subscribing to Laxmi Dental Ltd's IPO for the long term, citing its strong market position and growth potential despite high valuations.
Anand Rathi: The brokerage noted that the IPO, priced at ₹428 per share, values the company at ₹23,522 million with a P/E ratio of 64.6x based on FY25 projected earnings. While the valuation is aggressive, Laxmi Dental's leadership as one of India's top two dental laboratories by revenue and its status as a leading dental product exporter make it attractive. Growth drivers include evolving regulations, a shift to organized players, rising demand for dental aesthetics, and metal-free products. They recommend subscribing for the long term.
SBI Securities: The brokerage also suggests a long-term subscription, despite the higher P/E ratio of 94.6x at the upper price band based on FY24 earnings. Improved operational performance, with 60.3 percent of FY24 revenue and 95.6 percent of EBITDA achieved in 1HFY25, indicates strong growth. Margins improved from 4.0 percent in FY22 to 19.5 percent in 1HFY25, supported by operational efficiencies. SBI Securities expects profitability to rise further with reduced interest costs post-debt repayment.
About the Company
Laxmi Dental operates six manufacturing facilities for dental products, with three located in Mira Road, two in Boisar, and one in Kochi. Additionally, the company has five supporting facilities situated in Mumbai, Delhi, Bengaluru, and Ahmedabad.
The Boisar facilities adhere to the quality system regulations of the United States Food and Drug Administration (USFDA), while the manufacturing units in Mira Road and Boisar hold ISO certifications, signifying compliance with internationally recognized quality standards for medical devices.
According to its draft papers, Laxmi Dental ranks among the top two dental laboratories in India by revenue for FY23. The company’s six manufacturing facilities collectively span a total area of 146,804.42 square feet, underscoring its robust production capacity.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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