Laxmi Dental IPO: The dental care firm’s ₹698 cr issue booked 84 times on final day; check details here

The ₹698-crore IPO of Laxmi Dental, the first public issue from the dental care industry, has received an overwhelming response from all categories of investors, particularly non-institutional and retail participants. The issue, offered at a price band of ₹407-428 per share, was oversubscribed 84 times, with investors bidding for over 77 crore shares worth ₹32,100 crore against 89.70 lakh shares on offer.

According to the latest data available on the BSE, as of 3 PM on the final day of bidding, the issue was subscribed 131 times in the non-institutional investor (NII) category, followed by 64 times in the retail segment and 70 times in the qualified institutional investor (QIB) segment.

The Mumbai-based company’s IPO was subscribed 5.33 times on Day 1, followed by 16.06 times on the second day of bidding.

As per the draft red herring prospectus (DRHP) filed with SEBI, 75% of the issue has been reserved for QIBs, 15% for NIIs, and the remaining 10% for retail investors. The IPO lot size is 33 shares and in multiples thereafter, with a minimum application amount of ₹14,124 for one lot in the retail category.

Laxmi Dental’s IPO comprises a fresh issue of equity shares worth ₹138 crore and an offer for sale (OFS) of up to 1.31 crore shares by promoters at a pre-IPO market capitalisation of ₹2,352 crore. Under the OFS, promoters Rajesh Vrajlal Khakhar, Sameer Kamlesh Merchant, and OrbiMed Asia II Mauritius Ltd will dilute their stakes. The promoters and promoter group entities collectively hold a 46.56% stake in the company, while public shareholders own the remaining 53.44%.

The company plans to utilise the funds from the fresh issue to repay debt, finance capital expenditure, invest in its subsidiary Bizdent Devices Pvt Ltd, and meet general corporate expenses.

Ahead of the IPO opening, Laxmi Dental raised ₹314 crore from 31 anchor investors by allotting 73.39 lakh shares at the upper end of the price band, ₹428 per share. Marquee investors in the issue include Abu Dhabi Investment Authority, Nomura, Goldman Sachs, Al Mehwar Commercial Investments, Aditya Birla Sun Life Mutual Fund, ICICI Prudential MF, HDFC MF, Kotak MF, Tata MF, Birla Sun Life Insurance, Max Life Insurance, and Natixis Investment Managers.

Brokerages have recommended a ‘Subscribe’ rating for the issue, citing Laxmi Dental’s comprehensive portfolio of dental products, extensive distribution network, and strong technological capabilities. Founded in 2004, the company offers custom crowns and bridges, branded dental products such as clear aligners and thermoforming sheets, aligner-related solutions, and paediatric dental products. According to the Frost & Sullivan (F&S) report mentioned in the DRHP, India’s custom-made crowns and bridges market is projected to grow from $1.4 billion in 2023 to $3.1 billion by 2030, at a CAGR of 11.8%.

Over the past three years, Laxmi Dental has posted an average earnings per share (EPS) of ₹1.55 and an average return on net worth (RoNW) of 22.77%. The issue is priced at a price-to-book value (P/BV) ratio of 33, based on its net asset value (NAV) of ₹12.97 as of September 30, 2024.

On the financial front, the company reported revenue of ₹195.26 crore in FY24, with a net profit of ₹25.23 crore. It turned profitable for the first time after recording losses of ₹4.16 crore in FY23 and ₹18.68 crore in FY22.

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