Laxmi Dental IPO Day 3: Check subscription status, GMP and other details. Should you apply or not?

Laxmi Dental IPO: The initial public offering (IPO) of Laxmi Dental opened for subscription on January 13 and will close today, January 15. The company, which aims to raise ₹698.06 crore through the IPO, has set a price band of ₹407-428 per share.

Laxmi Dental Day 3 Subscription Status

Laxmi Dental IPO was booked 23.19 times by 11:10 am on Day 3. Investors bid for 20.80 crore shares as against 89.70 lakh shares on offer. The retail portion of the public issue was subscribed 39.49 times while the Non-Institutional Investors’ (NII) category received 56.79 times bids. The QIB quota was bid 0.96 times by this period.

Laxmi Dental GMP today

The company’s shares in the grey market traded at a premium of ₹142. This indicates an estimated listing price of ₹570, up 33.18 percent from the IPO price of ₹428. It was the same in the last 2 sessions but declined from ₹160 on December 12.

However, one must note that grey market premium is only an indicator of how the company’s shares are performing in the unlisted market and can change quickly.

Laxmi Dental IPO details

The IPO is 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. Under the OFS, investor OrbiMed Asia II Mauritius Ltd will also offload shares of the leading B2C dental aligner company Laxmi Dental. The promoters and promoter group owned a 46.56 per cent stake in the company, while public shareholders held a 53.44 per cent holding.

For prospective investors, the minimum lot size for application is 33 shares and in multiples thereof. Retail investors are required to invest a minimum amount of ₹14,124 to participate in the offering.

The issue raised ₹314.13 crore from anchor investors ahead of IPO, on January 10.

The company plans to utilize the net proceeds from the fresh issue to achieve multiple objectives. These include the repayment or prepayment, either in full or in part, of certain outstanding borrowings availed by the company and its subsidiaries. Additionally, funds will be allocated towards capital expenditure requirements, such as purchasing new machinery for the company and its subsidiary, Bizdent Devices Private Limited. A portion of the proceeds will also be directed towards general corporate purposes, ensuring flexibility in meeting operational and strategic needs.

The company has reserved 75 percent of the net offer for the qualified institutional bidders (QIBs), while non-institutional investors (NIIs) will have 15 percent of the net offer. The remaining 10 percent of net offer will be allocated towards retail investors of the issue.

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.

The allotment for the Laxmi Dental IPO is expected to be finalised on Thursday, January 16. The IPO will list on BSE and NSE with the tentative listing date fixed as Monday, January 20.

Laxmi Dental IPO Review

Brokerages have recommended subscribing to Laxmi Dental Ltd’s IPO for the long term, citing the company’s strong market position and growth potential despite its high valuation.

Anand Rathi: Subscribe for long-term

The brokerage noted that the IPO is priced at ₹428 per share, valuing the company at ₹23,522 million with a price-to-earnings (P/E) ratio of 64.6x based on FY25 projected earnings. While they acknowledge the valuation appears aggressive, the brokerage highlights that Laxmi Dental ranks among the top two dental laboratories in India by revenue and is the leading exporter of dental products. It attributed future growth to evolving regulatory requirements in the medical devices sector, the transition from unorganized to organized players, rising demand for dental aesthetics, and a growing preference for metal-free products.

Hence, considering all the parameters, the brokerage has recommended investors to subscribe to the issue for long term.

SBI Securities: Subscribe for long term

The brokerage also sees long-term potential in the IPO, despite its higher P/E ratio of 94.6x at the upper end of the price band based on FY24 earnings. They point out that the company achieved 60.3 percent of its FY24 revenue and 95.6 percent of its EBITDA in the first half of FY25, indicating improved operational performance. SBI Securities highlights margin growth from 4.0 percent in FY22 to 19.5 percent in 1HFY25, driven by operational efficiencies, and expects further profitability improvements with reduced interest costs following debt repayment.

About the firm

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.