Suraksha Diagnostic IPO: Should you subscribe based on latest GMP?

The initial public offering (IPO) of Suraksha Diagnostic Limited opened for subscription on Friday, but has seen a lukewarm response from investors as it aims to raise Rs 846.25 crore.
Suraksha Diagnostic IPO saw a subscription rate of 0.11 times overall as of November 29, 2024. Breaking it down by investor category, the retail investors subscribed to 20% of the shares allocated to them. In the Qualified Institutional Buyer (QIB) category, there were no subscriptions recorded, while the Non-Institutional Investor (NII) category witnessed a 4% subscription of the allotted shares. This indicates a tepid response across most segments, with the retail category showing slightly better participation compared to others.
The price band for the IPO has been set between Rs 420 and Rs 441 per share. Each application must include a minimum of 34 shares, making the smallest investment for retail investors Rs 14,994 at the upper price limit.
For small non-institutional investors (sNII), the minimum investment requires purchasing 14 lots, equivalent to 476 shares, which amounts to Rs 209,916 at the highest price point. Larger non-institutional investors (bNII) need to invest in 67 lots, comprising 2,278 shares, totalling Rs 1,004,598.
This IPO is structured entirely as an Offer for Sale (OFS). This means the funds raised will go directly to the existing shareholders who are selling their stakes. The company itself will not benefit financially from this issuance.
The issue will remain open for subscription until December 3, 2024, with the listing expected on December 6, 2024, on both the BSE and NSE.
The latest grey market premium (GMP) for Suraksha Clinic and Diagnostic’s IPO, as of 7:25 AM on December 2, 2024, stands at Rs 0.
With the IPO’s price band set at Rs 441, the estimated listing price is also Rs 441, calculated by adding the upper price band to the current GMP. This suggests that the expected return per share is neutral, with no anticipated gain or loss (0.00%).
Founded in 2005, Suraksha Diagnostic Limited provides comprehensive medical services, including pathology, radiology testing, and medical consultations. The company operates a central reference laboratory, complemented by 8 satellite laboratories and 215 customer touchpoints as of June 30, 2024.
Suraksha Diagnostic has a strong presence in eastern India, covering states like West Bengal, Bihar, Assam, and Meghalaya. The company also offers online and offline medical consultations through 44 diagnostic centres housing 120 polyclinics and over 750 doctors.