Laxmi Dental has fixed the price band at Ra 407-428 per share. Investors can bid for a minimum of 33 shares and in multiples thereof
Laxmi Dental Ltd’s Rs 698 crore initial public offer (IPO) opens for subscription today. The IPO is a combination of a fresh issue of equity shares for up to Rs 138 crore and an offer for sale (OFS) of up to 1.31 equity shares worth Rs 560 crore by promoters – Rajesh Vrajlal Khakhar, Sameer Kamlesh Merchant and other shareholders, according to the Red Herring Prospectus (RHP).
Nuvama Wealth Management Ltd, Motilal Oswal Investment Advisors Ltd and SBI Capital Markets Ltd are the book-running lead managers for the issue, which will be registered with Link Intime India Pvt.
Laxmi Dental has fixed the price band at Ra 407-428 per share. Investors can bid for a minimum of 33 shares and in multiples thereof. The minimum investment for retail investors is set at Rs 14,124.
Of the net issue, 75 per cent has been booked for qualified institutional buyers (QIBs), 15 per cent has been allocated for non-institutional investors (NIIs) and the remaining 10 per cent for retail investors.
The company raised a little over Rs 314 crore from anchor investors, ahead of its public issue opening for subscription. The anchor round saw participation from domestic mutual funds, insurance companies and foreign companies, according to a circular uploaded on the BSE website on Friday.
Aditya Birla Sun Life Mutual Fund (MF), ICICI Prudential MF, HDFC MF, Kotak MF, Mirae Asset MF, Tata MF, Birla Sunlife Insurance, Max Life Insurance, Abu Dhabi Investment Authority, Nomura, Goldman Sachs, Al Mehwar Commercial Investments and Natixis Investment Managers, among others, have been allotted shares in the anchor round.
The Rs 698 crore issue of Laxmi Dental Limited opens for subscription today, January 13. The subscription window will close on Wednesday, January 15. The allotment of shares is expected to be finalised on Thursday, January 16. The shares are expected to list on the BSE and NSE on Monday, January 20.
The company aims to use the proceeds from the issue for repayment or prepayment of certain outstanding borrowings by the company, funding the capital expenditure requirements for purchasing new machinery, investment in subsidiary Bizdent Devices Pvt Ltd and general corporate purposes.
According to Investorgain.com, the latest Grey Market Premium (GMP) for Laxmi Dental’s IPO is Rs 160, as of January 13, 2025. With the issue’s price band set at Rs 428, the estimated listing price for the IPO is Rs 588, which reflects a potential gain of 37.38 per cent per share.
"At a valuation of Rs 428 per share, the issue is seeking a market capitalization of Rs 23,522 million, with a price-to-earnings (PE) ratio of 64.6x based on FY25 annualized earnings, which appears aggressively priced," said analysts at Anand Rathi.
The company ranks among the top two dental laboratories in India by revenue and is the leading exporter of dental products.
“Going forward, growth is expected to be driven by trends such as changing regulatory requirements in the medical devices sector, the transition from unorganized to organized players, increasing awareness and demand for dental aesthetics, and the growing preference for metal-free dental products,” according to the brokerage.
Considering all these factors, the brokerage firm recommended investors to subscribe to the issue for long term.
According to analysts at SBI Securities, Laxmi Dental Ltd is valued at a FY24 P/E of 94.6x at the upper end of the price band on post-issue capital. In 1HFY25, the company reported 60.3 per cent of its FY24 revenue and 95.6 per cent of its EBITDA, reflecting a significant improvement in performance.
“Going forward, factors such as the shift from the unorganized to the organized segment, greater awareness and adoption of dental aesthetics and shift towards metal free products are likely to drive growth for the company,” the brokerage firm said.
The company has witnessed margin improvement from 4.0 per cent in FY22 to 19.5 per cent in 1HFY25 driven by operational efficiencies. Reduction in interest cost following debt repayment is likely to improve profitability further, it added.
According to the brokerage firm, Laxmi Dental 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 93 times, the valuation appears expensive. Hence, it has assigned a ‘Neutral’ rating to the issue.
Laxmi Dental Ltd, India’s only end-to-end integrated dental product company, offers a wide range of dental products across three verticals: Laboratory Offerings (custom crowns & bridges), Aligner Solutions (clear aligners), and Paediatric Dental Products (pre-formed crowns, space maintainers, etc.). The company uses a B2B2C business model, selling clear aligners through a network of over 22,000 dental clinics, companies, and dentists, making the product more affordable with flexible payment options.
Laxmi Dental’s key offerings include metal-free crowns and bridges, particularly its premium Illusion Zirconia brand, which accounts for over 50% of its domestic dental laboratory revenue. In 2024, the company introduced iScanPro, an intraoral scanner, and digital impressions became a significant portion of its dental restoration sales. Laxmi Dental exports to over 90 countries and has a strong presence internationally.
The company operates six manufacturing facilities across India (Mumbai, Boisar, Kochi) and has additional supporting facilities in major cities like Delhi and Bengaluru. As of September 30, 2024, the company continues to grow rapidly, driven by its extensive dental network and adoption of digital dentistry.