Suraksha Diagnostic IPO allottees may see modest listing gains on Dec 6; analysts recommend trading strategy

Suraksha Diagnostic allottees may see modest listing gains on Dec 6; analysts recommend trading strategy

Suraksha Diagnostic Ltd shares are set to make their debut on the stock exchanges on December 6. The mainboard issue closed on December 3 with a subscription of 1.27 times.

The Rs 846-crore IPO received bids for 1.70 crore shares against 1.34 crore shares on offer. The price band for the issue was set at Rs 420-441 per share.

Suraksha Diagnostic offers a range of pathology, radiology, and medical consultation services, supported by a central reference laboratory and eight satellite laboratories, enabling it to serve a broad customer base.

Prathamesh Masdekar, Research Analyst at Stoxbox, highlighted the company's uneven financial performance, noting a setback in FY23 but signs of recovery in recent quarters.

"At the upper price band, Suraksha Diagnostic is highly valued compared to its peers. Investors who received share allotments should hold and monitor the company’s performance in the coming quarters," Masdekar said.

Suraksha Diagnostic IPO fully subscribed on Day 3, QIBs, NIIs lead; check latest GMP

However, Narendra Solanki, Head of Fundamental Research - Investment Services at Anand Rathi Shares, expressed caution, citing the competitive nature of the diagnostic sector and the company’s limited geographic presence in eastern India.

"The issue appears richly priced. We recommend an 'Avoid' rating for the IPO," Solanki said.

At the upper end of the price band, the company is valued at 99.3 times its FY24 earnings and 75 times its annualised FY25 earnings. The post-issue market capitalisation of the company stands at Rs 2,296.76 crore, with a market cap-to-sales ratio of 10.5 based on its FY24 earnings.

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