Ahead of launching its IPO, Nureca Ltd. raised Rs 44 cores at the upper price range from two anchor investors on February 12. Nexpact Ltd. mopped up 8.63 lakh equity shares or 77.55 percent for Rs 34.55 crores, and the Next Orbit Ventures Fund invested Rs 10 crore to acquire 2.50 lakh equity shares or 22.45 percent. The Nureca IPO launch date is set for February 15. The two days bidding window will close for general investors on February 17, 2021.
Nureca IPO worth Rs 100 crore containing fresh equity shares will launch in the price band of Rs 396-400 apiece. The company revealed in RHP that it would utilise the proceeds from the offer to meet incremental capital needs and general corporate purposes.
Retail investors will have to apply for a minimum lot size of 35 shares, means that the minimum investment size will be Rs 13,860 to Rs 14,000. Employees will receive a discount of Rs 20 on the IPO market price as the issuer reserved 1 core equity shares in employee quota. Anchor investors had an opportunity to bid for the issue on February 12, and Nexpact Ltd. and Next Orbit Ventures Fund together picked up Rs 44 cores worth of equity shares.
The basis of allotment finalisation will happen on February 23, and the tentative listing date is February 26, 2021. The shares will list in the Bombay Stock Exchange and the National Stock Exchange.
Nureca Ltd. operates in the highly fragmented market, produces home healthcare and wellness equipment for chronic patients. The company sells its products directly to the consumers, mainly through online e-commerce platforms and its website, drtrust.in.
The company has a manufacturing unit in Chandigarh, operating at 20 percent capacity utilisation. But it mainly outsources its products to domestic and international suppliers. It sells its products under brand names of Dr.Trust”, “Dr. Physio” and “TRUMOM.
Company financial reveals a steady growth between FY18-20. Its recent performance reflects that the company received benefits from the pandemic outbreak. During the six months concluded in September 2020, the company clocked a profit of Rs 36.18 crores against a revenue of Rs 122.44 crores.
Per a WHO (World Health Organisation) report, the healthcare equipment market is pegged to grow at a CAGR of 10 percent with India having a large market share of over 84 percent. Nureca being a key player in the segment, enjoys a huge growth opportunity. However, the company needs to maintain the high growth rate registered during the first half of FY21. But as the situation normalising, it may face some challenges in sustaining the high growth rate. Additionally, any delay in innovation and changing government policies can also impact its growth.
On the positive side, the firms operates in an asset-light model business model and has a well-diverse product portfolio. It continually focuses on quality and innovation, possesses technical expertise and understanding of the market to sustain long-term growth. The company operates in a niche market, has a well-established consumer base.
Nureca is a new company, started operating in 2016. Experts think that small IPO size might lead to oversubscription, which can help the company make a decent debut in the stock exchange market.
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