Contrary to expectations, the initial public offering (IPO) of Entero Healthcare is getting a muted response from investors on the second day of the bidding process too. The issue was booked just 19% so far with no categories sailing through.

In the unlisted market, the company’s shares are trading with a marginal premium of Rs 5.

Entero Healthcare IPO price band

The price band for the public offer has been fixed from Rs 1,195-1258 per equity share. Bids can be made for a minimum of 11 shares and in multiples thereafter.

Entero Healthcare IPO review

Analysts advised investors to subscribe to the IPO over the strong financial track record, improvement in operational performance, and optimistic industry growth outlook.

“The issue is valued at a P/E of 111.2x on the upper price band based on FY24E earnings, which we feel is fairly valued in comparison to its peers. We, therefore, recommend Subscribe rating to the issue,” said BP Equities.

Other details

The IPO comprises a fresh equity issue of Rs 1,000 crore and an offer for sale of up to 47.69 lakh shares. Under the OFS, Prabhat Agrawal, Prem Sethi, Orbimed Asia Iii Mauritius, Chethan MP, and Deepesh T Gala, among others, will offload shares.The company intends to use the proceeds towards repayment of debt, long-term working capital requirements, funding subsidiaries, and pursuing inorganic growth initiatives through acquisitions as well as for general corporate purposes.The offer is being made through the book-building process, where 75% of the issue is reserved for qualified institutional buyers, 10% for non-institutional investors, and the rest 10% for retail investors.

Entero Healthcare Solutions helps healthcare product manufacturers by providing them with reach and accessibility to pharmacies, hospitals, and clinics. As of March 2023, the company has 73 warehouses located across the country.

The company’s main focus is to create an organized and technology-driven healthcare product distribution platform that serves the entire healthcare ecosystem pan-India. Its pan-India approach to acquiring and integrating smaller distributors has increased its geographic reach and has grown its customer base.

During FY23, revenue from operations increased 31% year-on-year (YoY) to Rs 3,300 crore and losses narrowed to Rs 11.1 crore from Rs 29.4 crore a year earlier. The company also has a record of sustained growth in revenue from operations, at a CAGR of 36.2% during FY21-23.

ICICI Securities, Dam Capital Advisors, Jefferies India, JM Financial and SBI Capital Markets are the book running lead managers for the IPO.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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