Mon Dec 02 11:24:09 UTC 2024: ## Suraksha Diagnostic IPO Sees Sluggish Second Day

**Kolkata, India – December 3, 2024** – The initial public offering (IPO) of Suraksha Diagnostic Ltd., an integrated diagnostic chain, ended its second day of trading with a lackluster 25% subscription rate, according to data from the Bombay Stock Exchange (BSE). This follows a similarly underwhelming first day, which saw only 11% subscription.

The ₹846 crore IPO, which offered shares priced between ₹420 and ₹441, closed on December 3rd. While the retail investor segment showed relatively stronger interest, reaching 44% subscription at its peak, overall participation remained significantly below expectations. Non-institutional investors contributed a mere 11% at the close, with Qualified Institutional Buyers (QIBs) participation remaining low throughout the day.

The IPO, which consisted solely of an offer for sale of existing shares by promoters and investors, aimed to raise funds without issuing new shares. Suraksha Diagnostic, established in 2005, operates a network of diagnostic centers and sample collection points across eastern and northeastern India. The company boasts a central reference laboratory, eight satellite laboratories, and 194 customer touchpoints.

Despite the company highlighting its profitability and financial performance, including a positive compound annual growth rate (CAGR) in profit after tax and EBITDA, analysts expressed concerns about the IPO’s valuation. Canara Bank Securities cited a high Price-to-Earnings (P/E) ratio of 99x, indicating a fully priced IPO, and warned of potential short-term risks. Furthermore, concerns were raised about the financial performance of three subsidiaries which reported losses in fiscal 2024.

While Suraksha Diagnostic holds a relatively small market share in the Eastern India diagnostics market (1.15% to 1.30%), the company’s focus on an underpenetrated market suggests potential for growth. However, the subdued investor response to the IPO suggests concerns remain regarding the current valuation and the overall market sentiment. The IPO’s grey market premium (GMP) remained at ₹0 throughout the offering period, indicating no premium over the issue price.

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