The IPO, which is being sold in a Rs 396-400 price band, received bids for 1,50,98,335 shares, which was 10.77 times the issue size of 14,01,595 shares. Prospective retail investors can bid for a minimum of 1 lot of 35 shares and a maximum of 490 shares or 14 lots. Employees of the company are being offered a discount of Rs 20 per share.
The company has allotted 11,13,750 shares worth Rs 44.55 crore to two anchor investors at an upper price band of Rs 400 per equity share. The issue was subscribed 5.73 times on the first day of subscription on Monday.
At the upper price band, the stock is priced at pre-issue PE of 46.91 times its FY20 EPS of Rs 8.53. Post issue, the stock would be priced at a P/E of 62.55 times on its EPS of Rs 6.40.
Incorporated in November 2016, the company is a B2C company engaged in the business of home healthcare and wellness products. A digital first company, Nureca sells products through online channel partners such as e-commerce players, distributors and retailers. It also sells products through its own website
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According to WHO, the market for such devices is expected to grow at a CAGR of 10 per cent. India is the major market with around 84 per cent plus-market share.
“The company is expected to see good growth on the back of its diversified portfolio range, growth in the home healthcare segment and higher online channel mix. On the flip side, significant challenges or delays in company’s innovation and development of new products, technologies and indications could have an adverse impact on the company’s long-term success,” SMC Global said in a note.
The revenue of the company rose at a compounded annual growth rate of 122 per cent over FY18-FY20, while its net profit grew 44 per cent CAGR during the same period.
Reliance Securities said that with thin history, frequent policy changes by the government and a substantial improvement in earnings before fundraising could raise some apprehensions. But considering attractive valuations and sizable opportunity, it recommended subscribing to this issue.
“Nureca’s Ebitda and PAT became almost 5.7 times in H1FY21 compared with FY20 performance. This is mostly led by operating leverage. Further, robust margins and comfortable leverage position — gearing ratio at 25 per cent — led to robust return ratio for the company. Debtor cycle also improved from 47 days in FY20 to merely six days in H1FY21,” the brokerage said.
