The initial public offer (IPO) of Entero Healthcare opened for subscription today. The company plans to raise about Rs 1600 crore from the IPO, which is the biggest fundraise by any company so far this year through the primary market route.

Entero Healthcare raised Rs 716 crore from 25 anchor investors ahead of the issue opening.

Entero Healthcare IPO review

Analysts advised investors to subscribe to the IPO over 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 an Subscribe rating to the issue,” said BP Equities.

“This combination of extensive reach, diverse product portfolio, robust infrastructure, and skilled workforce positions Entero Healthcare as a key player in India’s healthcare distribution, well equipped to address the evolving needs of the market and contribute to improved healthcare access across the country,” said Entero Healthcare, while recommending a subscribe.

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.

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, 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, 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 to Rs 3300 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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