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  • Writer's pictureJatin Agarwal

Entero Healthcare Solutions IPO

Entero Healthcare Solutions IPO: Pioneering Healthcare Distribution


Entero Healthcare Solutions Logo

Company Overview

Entero Healthcare Solutions Limited, incorporated in 2018, is a leading distributor of healthcare products in India. The company's expansive network includes relationships with over 1,900 healthcare product manufacturers, granting access to more than 64,500 product stock-keeping units. With 73 warehouses across 37 cities and servicing over 81,400 pharmacies and 3,400 hospitals across 495 districts, Entero Healthcare has cemented its position as a key player in the healthcare distribution sector​.

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Company Financials

Entero Healthcare has shown remarkable financial growth, with its revenue for the fiscal year ending March 31, 2023, reaching ₹3,305.72 Crores, up from ₹2,526.55 Crores in the previous year. The profit after tax for the period ending September 30, 2023, was ₹11.64 Crores, demonstrating a significant recovery and growth trajectory​.


Company SWOT Analysis

  • Strengths: Large and growing distribution network, diversified product offerings, strong relationships with manufacturers.

  • Weaknesses: Dependence on the pharmaceutical and healthcare products market, which is subject to regulatory changes.

  • Opportunities: Expansion into new markets, increased demand for healthcare products, potential for acquisitions.

  • Threats: Competitive industry landscape, operational risks related to supply chain disruptions.


Company Valuation

Entero Healthcare Solutions' market capitalization at IPO is projected to be ₹3021.21 Crores, indicating the scale and potential of the company within the healthcare distribution market. The valuation metrics provide a deeper insight into the financial health and investment potential of the company:

  • ROE (Return on Equity): -2.66%, reflecting the challenges and investment back into the company for growth.

  • ROCE (Return on Capital Employed): 6.06%, showcasing how efficiently the company is generating profits from its capital.

  • Debt/Equity Ratio: 0.45, indicating a balanced approach to leveraging debt for growth while maintaining a strong equity base.

  • P/BV (Price to Book Value): 7.22, suggesting the market is valuing the company's assets significantly above their book value, a common scenario for growth-oriented firms.

  • P/E Ratio: With a post-IPO EPS (Earnings Per Share) estimate of ₹9.7 and a price band of ₹1195 to ₹1258, the P/E ratio ranges significantly. This high P/E ratio implies investors are willing to pay a premium for the company's earnings, reflecting optimism about its future growth prospects.

IPO Overview

The IPO comprises a fresh issue of ₹1,000 Crores and an offer for sale (OFS) of ₹600 Crores, totaling ₹1,600 Crores. The IPO is set to bolster Entero Healthcare's capabilities and expand its market presence​.

IPO Details

  • IPO Opening Date: February 9, 2024

  • IPO Closing Date: February 13, 2024

  • Listing Date: February 16, 2024

  • Price Band: ₹1195 to ₹1258

  • Issue Size: ₹1,600 Crores

  • Lot Size: 11 Shares

  • Minimum Investment: ₹13,838 for retail investors​

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Objectives of the Issue

The IPO's proceeds are earmarked for repaying/prepaying certain borrowings, funding long-term working capital requirements, pursuing inorganic growth through acquisitions, and other general corporate purposes​.

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IPO Grey Market Premium (GMP)

As of the latest update, the GMP for Entero Healthcare Solutions IPO is ₹125, indicating positive investor sentiment and expectations of a premium listing​.

Conclusion

Entero Healthcare Solutions IPO presents an attractive investment opportunity in the healthcare distribution sector, backed by robust financials, a wide distribution network, and strategic growth initiatives. Investors should, however, weigh the company's valuation and market potential carefully before investing.


Disclaimer

All information is provided for educational and informational purposes only. Data is fetched from publicly available sources such as the DRHP filed by the company and other reliable sources. The website or the author takes no guarantee for the accuracy of the data; however, we have tried our best to present accurate data to our readers. Please consult a financial advisor or do your own analysis before investing/trading in the stock market.

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