The company works on an asset light business model which doesn’t require to invest heavily on physical assets such as plant and machinery, land and property, Hem Securities said.
The initial public offering of Nureca, the home healthcare and wellness products maker, has seen a massive subscription of 31.71 times on final day of bidding, February 17.
The QIB’s portion was booked 3.03 so far and that of non-institutional investors 15.43 times. Retail investors have been bidding aggressively to the issue as their portion set aside was subscribed 145.13 times, and that of employees 3.83 times.
The Rs 100-crore public issue has received bids for 4.44 crore equity shares against offer size of 14.01 lakh shares, the subscription data available on the exchanges.
Nureca already raised Rs 44.55 crore from anchor investors at higher end of price band of Rs 396-400 per share. The net issue proceeds will be utilised for working capital requirements. The public issue was opened for subscription on February 15.
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“Company is bringing the issue at P/E multiple of approximately 44x at higher end of price band on FY20 EPS basis. The home health market in India and neighbouring countries is expected to grow at a CAGR 11.0 percent by 2025, therefore the company’s business will expected to have advantage from such growth. Also, company’s partnership with Croma, India’s first omni-channel electronics retailer from the Tata Group which will sell products from its Dr Trust and Dr Physio brands at 30 Croma stores across the country can benefit the company going forward,” said Hem Securities.
The company sells its home healthcare and wellness products through online channel partners such as e-commerce players, distributors and retailer. The company also sells products through its own website drtrust.in and third party e-commerce platforms, distributors and retailers.
The company works on an asset light business model which doesn’t require to invest heavily on physical assets such as plant and machinery, land and property. Company’s business model is scalable where company can expand its geographic presence, distribution reach & portfolio of products without incurring heavy cost.
“As in first half of FY21 company’s financials seen a significant jump due to outbreak of COVID-19. Hence sustainability of such financial performance needs to be seen with the situation returning back to normal,” the brokerage said.
“Looking after all above, we recommend risk taking investor to subscribe the issue for short term as due to small size, prices can see some volatile movement,” the brokerage added.
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