Suraksha Diagnostic Ltd, the pathology chain backed by healthcare-focused private equity firm OrbiMed, made a weak debut on stock exchanges with its shares listing at a discount to its initial public offering price.
The company’s shares began trading at Rs 437 apiece on the BSE, compared with the IPO price of Rs 441, stock-exchange data showed. The shares touched a low of Rs 424.20 and a high of Rs 449.00 in early trade.
The tepid debut comes after the company’s IPO received a lukewarm response and barely managing to cross the finish line on the third and final day of the issue. The offering of 13.43 million shares, excluding the anchor allotment option, was subscribed about 1.27 times.
Institutional investors bid for 1.74 times their quota while non-institutional investors placed bids for 1.40 times the shares set aside for them. Retail investors' portion was covered only 94%, stock-exchange data showed.
Suraksha Diagnostic had filed draft documents for the IPO in July and received regulatory approval last month. The IPO didn't include any fresh issue of shares and entirely comprised an offer for sale.
OrbiMed sold over 10.66 million shares. This is more than half the 17.37 million shares, or a 33.35% stake, it held in the diagnostics chain before the IPO. The company’s promoters sold about 6.3 million shares while two other individual shareholders offloaded 2.13 million shares, the IPO documents show.
The diagnostics chain had set the price band of Rs 420 to Rs 441 per share for the Rs 846.25-crore IPO. OrbiMed mopped up Rs 470 crore ($55.7 million) through the partial exit and just about met benchmark returns.
OrbiMed first invested in Suraksha in December 2016. It put in Rs 164 crore through a primary infusion and a secondary purchase of shares from PE firm Lighthouse.
For FY24, Suraksha recorded close to Rs 219 crore in revenue, of which 95.48% came from its core geography of Kolkata and rest of West Bengal. It posted an EBITDA of Rs 74 crore and a net profit of Rs 23 crore. It derived 53.3% of its revenue from pathology, 46% from radiology, and 0.18% from Covid-19 testing.