Laxmi Dental Limited is set to launch its Initial Public Offering Laxmi Dental Limited IPO with the following key details:
- IPO Dates: The subscription period opens on January 13, 2025, and closes on January 15, 2025.
- Price Band: The shares are priced between ₹407 and ₹428 per share.
- Issue Size: The IPO aims to raise approximately ₹698.06 crore, comprising:
- Fresh Issue: ₹138 crore
- Offer for Sale (OFS): ₹560.06 crore
- Face Value: ₹2 per equity share.
- Lot Size: A minimum of 33 shares, totaling ₹14,124.
- Listing Date: Expected on January 20, 2025, on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
Who is The Founder of Laxmi Dental Limited?
Laxmi Dental Limited was founded by Mr. Mitesh G. Jain. He is the promoter and managing director of the company, playing a key role in its growth and success in the dental products industry.
Laxmi Dental Limited IPO Company Overview:
Laxmi Dental is an integrated dental products company offering a range of products, including custom-made crowns and bridges, clear aligners, thermoforming sheets, and pediatric dental products. It operates across six manufacturing facilities spanning 147,029.63 square feet and is the largest exporter of custom-made dental prostheses, primarily serving the US and UK markets.
Use of Proceeds:
The funds from the fresh issue are intended for:
- Repayment or prepayment of certain outstanding borrowings.
- Investment in subsidiaries for capital expenditure.
- General corporate purposes.
Laxmi Dental Limited IPO Financial Highlights:
For the period ending September 30, 2024, Laxmi Dental reported:
- Revenue: ₹117.9 crore
- Profit After Tax: ₹22.74 crore
- Net Worth: ₹67.09 crore
- Total Borrowing: ₹40.91 crore
Grey Market Premium (GMP):
As of January 9, 2025, the GMP for Laxmi Dental IPO shares stands at ₹155, indicating an expected listing gain of around 36.21% based on the upper price band of ₹428.
Investment Considerations:
Laxmi Dental has demonstrated strong growth, with a revenue of ₹195.26 crore in FY2024 and a profit after tax margin of 13.03%. The company’s return on equity (ROE) is 78.78%, reflecting high profitability. Additionally, the debt-to-equity ratio stands at 0.94, indicating a balanced approach to financing operations.
Conclusion:
Given the company’s robust financial performance, market leadership in the dental sector, and favorable grey market premium, the Laxmi Dental IPO presents an attractive investment opportunity. However, potential investors should conduct thorough research and consider their risk tolerance before applying.
Strengths of Laxmi Dental Limited IPO
(1) Strong Market Position and Leadership:
- Laxmi Dental has established itself as one of the largest exporters of custom-made dental prostheses, particularly to the US and UK markets. This strong market presence has provided the company with a competitive edge.
- The company is led by an experienced management team, with Mitesh G. Jain at the helm, who has played a pivotal role in its growth and success.
(2) Diverse and High-Quality Product Portfolio:
- Laxmi Dental offers a wide range of dental products, including custom-made crowns and bridges, clear aligners, and pediatric dental products. This diversification allows the company to cater to various segments of the dental market.
(3) Robust Manufacturing Capabilities:
- The company operates six state-of-the-art manufacturing facilities spread over 147,029.63 square feet, equipped with advanced technologies to ensure high-quality production.
(4) Export Market Focus:
- Laxmi Dental’s heavy focus on export, particularly to developed markets like the US and UK, reduces its dependency on the domestic market and provides more significant growth opportunities.
(5) Strong Financial Performance:
- The company has consistently delivered strong financial results, including high revenue growth and solid profitability. For example, in FY 2024, Laxmi Dental reported revenue of ₹195.26 crore and a profit after tax (PAT) of ₹22.74 crore.
- The Return on Equity (ROE) stands at an impressive 78.78%, highlighting efficient use of equity capital.
Risks of Laxmi Dental Limited IPO
(1) Dependency on Export Markets:
- Laxmi Dental’s significant reliance on exports, especially to the US and UK, exposes it to risks related to global economic conditions, foreign exchange fluctuations, and regulatory changes in international markets.
(2) Competition:
- The dental products industry is highly competitive, with both domestic and international players offering similar products. Larger companies may have greater resources to invest in innovation, marketing, and distribution, which could put pressure on Laxmi Dental’s market share.
(3) Regulatory Risks:
- Laxmi Dental is subject to strict regulations and standards in the dental products sector, both domestically and internationally. Any changes in regulations could affect the company’s ability to sell certain products or increase compliance costs.
(4) Operational Risks:
- The company’s manufacturing facilities are a critical asset for production. Any disruption in operations due to equipment failure, labor issues, or supply chain disruptions could have an adverse impact on its ability to meet market demand and maintain production schedules.
(5) Currency and Foreign Exchange Risk:
- Since a significant portion of Laxmi Dental’s revenue comes from exports, fluctuations in foreign exchange rates could have a material impact on its financial performance.
- A stronger Indian Rupee (INR) could result in lower revenue when converted into foreign currencies like the US Dollar (USD) or British Pound (GBP).
Conclusion:
Strengths:
- Strong market position, diverse product portfolio, high-quality manufacturing facilities, and consistent financial performance position Laxmi Dental as a well-established player in the dental sector.
Risks:
- Global market dependence, regulatory challenges, competitive pressures, and operational risks are factors that could negatively impact the company’s performance.
Investors should weigh these strengths and risks carefully before deciding to invest in Laxmi Dental’s IPO. While the company presents a promising opportunity, its success will depend on continued operational efficiency, international market growth, and the ability to manage financial and market risks effectively.
Laxmi Dental Limited IPO GMP
As of January 9, 2025, the Grey Market Premium (GMP) for Laxmi Dental Limited’s IPO is ₹155. This suggests a potential listing gain of around 36.21% based on the upper price band of ₹428 per share.
The GMP indicates the price at which shares are trading unofficially in the grey market before the official listing. A positive GMP generally indicates strong investor sentiment and is a favorable sign for the IPO’s listing performance.
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