Mon Dec 02 06:23:52 UTC 2024: ## Suraksha Diagnostic IPO Opens Weakly, Raises Concerns

**Kolkata, India – December 1, 2024** – The initial public offering (IPO) of Suraksha Diagnostic, a leading diagnostic services provider in eastern India, opened to a lukewarm reception on its first day, November 29th. The IPO, aiming to raise ₹846.25 crore by selling 1.92 crore fresh shares, saw only 11% subscription by the close of the first day.

The price band for the IPO is set between ₹420 and ₹441 per share. While retail investors subscribed to a mere 0.20 times their allocated portion, and non-institutional investors (NIIs) reached only 4%, a significant concern arose from the complete absence of participation from Qualified Institutional Buyers (QIBs) on Day 1. This is unusual for an IPO of this size and has led analysts to speculate that QIBs might make a late surge on the final day of subscription (December 3rd) to avoid under-subscription, mirroring recent trends seen in IPOs such as Hyundai Motor India’s.

Suraksha Diagnostic, founded in 2005, offers pathology, radiology, and medical consultancy services primarily in West Bengal (over 90% of its revenue), with operations also spanning Bihar, Assam, and Meghalaya. The company operates a central reference laboratory, eight subsidiary labs, and 215 customer touchpoints. However, this heavy reliance on a single region presents a significant revenue concentration risk.

Analysts at Bajaj Broking have flagged the IPO as “fully priced,” estimating a price-to-earnings (P/E) ratio of 74.87 based on projected FY25 earnings and 99.32 based on FY24 earnings. Anand Rathi Research echoed these concerns, stating the issue is “richly priced” and recommending an “Avoid” rating. The grey market, an unofficial indicator of investor sentiment, shows shares trading at par with the issue price, suggesting a subdued outlook.

The IPO is managed by ICICI Securities, Nuvama Wealth Management, and SBI Capital Markets as book-running lead managers, with Kfin Technologies serving as the registrar. Allotment is expected on December 4th, with a tentative listing date of December 6th on the BSE and NSE. Despite the initial weak response, analysts remain cautiously optimistic that the IPO might gain traction before its close.

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