Entero Healthcare Solutions IPO: 10 things to know before subscribing to the Rs 1,600-crore issue

Investors can bid for a minimum of 11 equity shares and in multiples of 11 shares thereafter.

The Rs 1,600-crore initial public offering (IPO) of Entero Healthcare Solutions, which opened for subscription on February 9, is the biggest offer of 2024, so far.

The issue is a mix of fresh shares worth Rs 1,000 crore and Rs 600-crore worth of shares offered for sale by several holders. Here are the details you should know before subscribing to the offer

1.) IPO dates

The offers, which opened on February 9, will close on February 13.

2.) Price band

The price band for the issue has been fixed at Rs 1,195-1,258 a share.

3.) Offer details

The Faridabad-based company announced the final allocation of 56,94,753 shares to anchor investors for Rs 1,258 apiece.

Corporate promoter OrbiMed Asia III Mauritius, holding a 57.27 percent stake in the company, will sell 38.15 lakh shares in the OFS. Promoters Prabhat Agrawal and Prem Sethi will sell 4.7 lakh and 3.13 lakh equity shares.

The remaining 1.7 lakh shares of the total OFS of 47.69 lakh will be sold by the remaining 16 shareholders.

4.) Objectives of the issue

The company plans to use Rs 142.5 crore of the net proceeds from the fresh issue to repay debt. A sum of Rs 480 crore will be set aside to met long-term working capital requirements and the remaining amount for inorganic growth initiatives through acquisitions and general corporate purposes, the company has said.

5.) Lot size

Investors can bid for a minimum of 11 shares and in multiples of 11 thereafter. The minimum application size for retail investors will be Rs 13,838 for and the maximum they can invest in the IPO is Rs 1,93,732 for 154 equity shares.

6.) Company profile

Incorporated in 2018, Entero is a healthcare product distributor in India. Utilising a technology-driven platform, the company offers distribution services to pharmacies, hospitals, and clinics across the country.

It operates 73 warehouses in 37 cities in 19 states and union territories, serving a customer base that includes over 81,400 pharmacies and 3,400 hospitals in 495 districts as of March 31, 2023, providing extensive access to healthcare product manufacturers.

7.) Company's financials 

In the first six months of FY24, Entero reported a net profit of Rs 11.64 crore compared to a loss of Rs 10.86 crore in the corresponding period of the previous fiscal. This performance was supported by robust operating figures, with revenue increasing by 19.7 percent to Rs 1,895.5 crore.

8.) Lead managers

ICICI Securities Limited, Dam Capital Advisors Ltd (Formerly Idfc Securities Ltd), Jefferies India Private Limited, JM Financial Limited and SBI Capital Markets Limited are the book-running lead managers to the issue. Link Intime India Private Ltd is the registrar.

9.) Key risks

i.) Any disruption to the operation of the company's warehouses or the development of new warehousing and logistics facilities could harm Entero's business, financial condition and results.

ii.) The company is subject to operational and logistical risks and its insurance coverage may not be adequate to protect against all potential losses to which the company may be subject.

iii.) The company operates in a highly fragmented industry, and as a result, it may not be able to successfully expand its market share.

10.) Listing Date

Entero Healthcare Solutions will likely list on BSE and NSE on February 16.