Laxmi Dental IPO opens today: The initial public offering (IPO) of integrated dental products company, Laxmi Dental, opens for public subscription today, January 13, 2025. Ahead of the opening of the subscription window, the company has announced that it has already raised Rs 314.13 crore from anchor investors on the bidding concluded on Friday, January 10, 2025.
Here are the key details of Laxmi Dental IPO as outlined in its Red Herring Prospectus (RHP):
Laxmi Dental issue size
Laxmi Dental IPO comprises a fresh issue of 32,24,299 equity shares and an offer for sale (OFS) of 1,30,85,467 shares with a face value of Rs 2 apiece. Rajesh Vrajlal Khakhar and Sameer Kamlesh Merchant are the promoters participating in the OFS, while OrbiMed Asia II Mauritius is from the Investors group divesting its stake via OFS. Among others, Jigna Rajesh Khakhar, Hasmukh Vrajlal Khakhar, Amrish Mahendrabhai Desai, Parag Jamnadas Bhimjiyani, and Kunal Kamlesh Merchant are also participating in the OFS.
Laxmi Dental IPO lot size, price band
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Laxmi Dental has set the price band for its IPO at Rs 407-428, and a lot size of 33 shares. Accordingly, investors can bid for a minimum of 33 shares and in multiples thereof. A retail investor would require a minimum of Rs 14,124 to bid for one lot of 33 shares or Rs 1,97,736 to bid for a maximum of 14 lots of 462 shares.
Laxmi Dental IPO grey market premium (GMP)
Meanwhile, the unlisted shares of Laxmi Dental were commanding a solid premium in the grey markets on Monday, January 13. Sources tracking unofficial market activities revealed that the company's shares were quoted trading at Rs 588 apiece, reflecting a grey market premium (GMP) of Rs 160 or 37.38 per cent over the upper end of the issue price of Rs 428.
Laxmi Dental IPO allotment, listing schedule
The three-day subscription window to bid for the Laxmi Dental IPO is set to close on Wednesday, January 15, 2025. Following that, the basis of the allotment of Laxmi Dental IPO shares is likely to get finalised tentatively on Thursday, January 16, 2025, and the company's shares will be credited into the demat account on Friday, January 17, 2025.
Shares of Laxmi Dental are slated to list on the BSE and the National Stock Exchange (NSE) on Monday, January 20, 2025.
Laxmi Dental IPO objective
Laxmi Dental, in its RHP, said that it will not receive any proceeds from the OFS. "Each of the Selling Shareholders will be entitled to the Offer Proceeds, to the extent of the Equity Shares offered by them in the Offer, net of their respective share of the Offer-related expenses. Accordingly, the Offer for Sale will not form a part of the Net Proceeds."
Laxmi Dental, however, proposes to use the proceeds from the fresh issue for the repayment/prepayment, in full or in part, of certain outstanding borrowings availed by the company, as well as for the investment in certain subsidiaries for the repayment/prepayment, in full or in part, of certain outstanding borrowings.
The company will also use the proceeds for investment in its subsidiary, Bizdent Devices Private, for the capital expenditure requirements for the purchase of new machinery. Laxmi Dental will utilise the remaining proceeds for funding the capital expenditure requirements for the purchase of new machinery for the company, as well as for general corporate purposes.
Laxmi Dental financial details
As per the RHP, Laxmi Dental's revenue from operations jumped to Rs 193.55 crore in FY24, up 19.74 per cent from Rs 161.63 crore reported in FY23.
Meanwhile, the total comprehensive income attributable to owners of the parent stood at Rs 24.67 crore against a net loss of Rs 3.89 crore reported in FY23. The company's total expenses stood at Rs 186.65 crore, up 11.26 per cent from Rs 167.75 crore reported in FY23.
Should you subscribe to Laxmi Dental IPO?
Canara Bank Securities - Subscribe for long term
Analysts at Canara Bank Securities have recommended investors subscribe to the public offering for a long-term perspective, citing that the company is poised to benefit from increasing dental awareness in India and global outsourcing trends, particularly in the US. "However, economic sensitivity, competition, and promoter stake dilution are risks that require monitoring."
Financially, the valuation, analysts said, is at the higher end, with a P/E of 89.17x as of FY2024 and an estimated P/E of 48.75x for FY2025E, suggesting fair pricing without direct listed competitors for comparison. "The diversified product portfolio, robust professional network, and digital adoption position the company for sustained domestic and international growth."
Deven Choksey Research - Neutral
Brokerage firm Deven Choksey Research has assigned a Neutral rating on the Laxmi Dental IPO. "Over the years, it has consistently expanded its production capacity and diversified its product portfolio. With increasing awareness of oral health, rising disposable incomes, and advancements in dental technologies, the demand for cosmetic dentistry procedures like teeth whitening and clear aligners is growing rapidly," said the brokerage in its report.
"Positioned to benefit from these industry tailwinds, Laxmi Dental plans to allocate approximately Rs 70 crore from IPO proceeds towards capex, out of which approximately Rs 38 crore would be deployed in FY26. Historically, the company has achieved a 5x asset turnover," it added.
Looking ahead, Laxmi Dental, as per the brokerage, is well-positioned with planned capex and a strategic shift toward branded products. "However, the absence of long-term contracts introduces uncertainty to near-term growth prospects. At a valuation of 93x, the valuation appears expensive."
About Laxmi Dental
Laxmi Dental is a dental products company incorporated in July 2004. The company offers a range of dental products, including custom crowns and bridges, clear aligners, and pediatric dental products. Laxmi Dental operates six manufacturing facilities across India and has a presence in over 90 countries. As of September 2024, the company had 2,372 employees and a network of over 22,000 clinics and dentists. The company operates a fully integrated model, handling design, manufacturing, and distribution of dental products.