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All You Need To Know Before Investing Into Nureca IPO : First Healthcare IPO Of 2021

Nureca is involved in the healthcare segment. It is a producer and distributor of healthcare and wellness products. It incorporated in 2016 and has online sales of products as its primary business. The company is active in the field of providing tools and equipment to check on chronic diseases and improve the condition of patients. The firm deals in various products under its purview. Some of them are :

Chronic disease products
Nutrition supplements
Lifestyle products
Orthopedic products

It sells its product online through its online portal known as Drtrust.in and is the first digital company to do the same as well. It also has e-commerce partners and sub distributors for facilitating its sales services.

IPO Details

The IPO is set to hit the subscription period on 15th Feb and the process would continue till 17th Feb, 2021. Also the Issue would be a book build issue. The shares are going to be listed on both NSE and BSE. The price band decided is 396 Rs. to 400 Rs. per share and the minimum lot size would be 35 shares. Nureca is planning to raise 10 crore Rs through fresh issue of shares and there is no offer for sale method applied. The registrar for the company is Link Intime India Private Limited.

Tabular Data

IPO OPENING DATE	15th Feb, 2021
IPO CLOSING DATE	17th Feb, 2021
ISSUE TYPE	Book Built Issue
Face Value per share	Rs. 10 per share
IPO price band	Rs. 396 to 400 Rs per share
LOT SIZE	35 shares
MINIMUM ORDER QUANTITY	35 shares
ISSUE SIZE	100 crore Rs.
OFFER FOR SALE	No shares allocated towards OFS
FRESH ISSUE	100 Crore Rs.
LISTING AT	NSE, BSE
LISTING DATE	26th Feb, 2021

IPO Size Details and Share Distribution

The promoter of the company is Saurabh Goyal. The promoter holds 46.67% in the company pre IPO lauch. Also the lead manager of the company is ITI Capital Ltd.

The IPO size of the company is 100 Crore Rs. The minimum subscription per bid is set at 35 shares amounting to 14000 Rs and the maximum bid is set at 490 shares amounting to 196000 Rs.

The shares of the company are allocated to various investor classes. The distribution is set in a way where retail investors can opt for only 10% shares. QIB accounts for nearly 75% of the shares issued. The NII accounts for the remaining 15% of the share base. The issue has a special reservation for the employees of the company. The amount of shares allocated for employees is 50 Lakh Rs. The employees would also be entitled to claim a discount of minimum 20 Rs per share allocated to them. Hence the distribution among the investors is :

INVESTOR CLASS	SHARE IN ISSUE
QIB (Qualified Institutional Buyers)	70%
NII (Non Institutional Investors)	15%
Retail Investors	10%
Employees	5% Shares worth 50 Lakh Rs. (20 Rs discount per share allowed to employees)

Also there are chances that the holdings by QIB may decrease to 50% and the NII may get the benefut for it. So NIIs share may increase to 35%. This can be known at the time of IPO launch only.

Important Dates

IPO OPENING DATE	15th Feb, 2021
IPO CLOSING DATE	17th Feb, 2021
IPO ALLOTMENT DATE	23rd Feb, 2021
REFUNDS	24th Feb, 2021
DEMAT A/C CREDITED ON	25th Feb, 2021
IPO LISTING DATE	26th Feb, 2021

The IPO will launch on 15th Feb, 2021. The IPO subscription will end on 17th Feb, 2021. The allotment will be finalised by 23rd Feb, 2021 and the refunds would be initiated from 24th Feb, 2021. The DEMAT account of the shareholders who got the allotment would be credited with the shares on 25th Feb, 2021 and the IPO listing is fixed around 26th Feb, 2021.

Objectives for IPO

The objectives behind the IPO launch are :

Meeting the working capital requirements of the company. The company has some expansion plans as well hence the money would be used in the same.
The money may be utilized for general corporate usage as well.

Company Financials

PARTICULARS (in million Rs.)	2019-20	2018-19	2017-18
ASSETS	340	236	70
REVENUE	994	620	201
NET PROFIT	64	63	32

The company is growing constantly. Also it is noticeable that the asset holdings has increased over years. Hence the company believes in having constant expansion plans. Also the interesting point is the F.Y 19-20 showed almost negligible growth of net profit. Hence this says that the company may have high payment due towards creditors or the investments are in vain. But the investments are not in vain as in Sept.2020 the company showed significant growth in asset base and net profit as well.

The company has more than 1000 million Rs. worth of asset holding as of Sept. 2020 and the profit of the company is 360 million Rs. which means that the profitability of the company increased more than the asset base. Hence the revenue inflows have boosted and the company is working well. Also the asset base of the company has turned profitable with lower payments towards creditors and profits available for further expansion.

This also shows that the company is able to grow itself well in lockdown due to the demand for oximeters and other equipment.

Pros

It has a well diversified product profile. Also it has an online mode of sale available as well which will make its sales go up. The distribution network online is really strong.
It has a well managed team.
The company provides a premium range of products under its products line.

Cons

The company is just raising 100 crore Rs which is a pretty small amount in comparison to the Indian market.
The company is scaling and has recently begun its journey. It is just 5 years old. Hence one should think and review the balance sheet as well before taking long term investment decisions.
The company’s profit did not grow during the 2019-20 period and stayed the same. While it increased in Sept 2020 but the reason was lockdown and excess demand of oximiteres and other products that the company produces. Hence The sales have boosted due to an extraordinary event. So one should consider to wait and measure the performance of the company for another year before investing.
The company has got the direct benefit of the patients who avoided visiting hospitals due to COVID situation and hence this is the reason why sales has boosted. The thing to loom is whether this flow continues or not ?
The company has only one lead manager.