Nureca Limited IPO Review – Date, Issue Price, GMP, Price Band, Analysis
Nureca IPO would open for subscription on 15th February, 2021. Nureca Limited is a healthcare and wellness products distributor in India. This company was generating 6% and 10% profits in FY20 & FY19 respectively. However, its profits jumped to 29% for 6 months ended Sep-2020. Nureca IPO Size is Rs 100 Crores only. Should you invest in Nureca Limited IPO? What are the risk factors an investor should keep in mind before applying for this IPO?
About Nureca Limited
They are a B2C company engaged in the business of home healthcare and wellness products, which offers quality, durability, functionality, usability and innovative designs. They enable customers with tools to help them monitor chronic ailments and other diseases, to improve their lifestyle. They believe in innovation and catering new products to the ever-growing needs of the home health care sector. They are a digital first company wherein they sell its products through online channel partners such as e-commerce players, distributors and retailer. Further, they also sell its products through its own website drtrust.in.
They have most of the product lines supporting the home health market in India, making it a one-stop solution provider. Dr Trust is a known for its innovative products in the market, and, with the segment showing significant potential for growth, the company is positioned to show significant growth.
They have a diversified product portfolio, which primarily caters to the home health care sector. They provide an improved product mix to its customers and their preferences, thereby targeting a wider customer base. Its growth is further driven by its ability to make available an assortment of quality products under trusted brands built by the company.
Nureca Limited IPO Details
Here are the IPO issue details.
|Nureca IPO – Issue Details|
|IPO Opening Date||15-Feb-21|
|IPO Closing Date||17-Feb-21|
|Face Value||Rs 10 per share|
|IPO Price band||Rs 396 to Rs 400 per share|
|Issue Size||Rs 100 Crores|
|IPO Lot Size||35|
|Lead Managers||ITI Capital|
|Listing at||BSE and NSE|
Objects of issue – Nureca Limited IPO
Here are the objects of the IPO issue.
1) Funding incremental working capital requirements of company
2) General corporate purposes.
Who are the company promoters?
Saurabh Goyal is the promoter of the company.
Here is the summary of the financial information of the company.
|Total Revenues (Rs in Millions)||Profits after tax
(Rs in Millions)
|6 Months ending Sep-20||1,229.7||361.8||29.4%|
Its EPS for FY2020 is Rs 9.14 and last 3 years average EPS is Rs 8.28. Its 6 months ending Sep-20 EPS is Rs 51.69.
What are the key strengths of Nureca Limited?
Every investor should understand the company’s key strengths so that one can compare with its competitors to know how unique is such company in their business. Their investment decision would change based on these facts. Here are the key strengths of the company.
1) Strong portfolio of its products and consistent focus on quality and innovation
2) Asset light business model and competitive products
3) Combination of technical expertise and understanding of Indian consumer preference
4) Experienced Promoter a strong senior management team having domain knowledge
What are the various strategies of Nureca Ltd?
Company strategies would help investors to know what company is intending to do in the future and whether these strategies would help in revenue or margin growth. Such information would help investors to decide whether to invest for short term, medium term or for the long term. Here are the company strategies.
1) Diversifying and strengthening its market by enabling them to cater to a wide range of geographies and customer segments
2) Strengthening its business through product innovation and new product launches
3) Strengthening up its business through effective branding, promotional and digital activities
4) Retain and attract the best talent and develop a performance focused culture
Why to invest in this IPO?
Here are a few reasons to invest.
1) Nureca Limited is a consistent growing healthcare and wellness products distributor in India.
2) It has generated strong revenue growth in the last 3.5 years. Its revenues were at 20 Crores in FY18 Vs 99.4 Crores in FY2020. It generated 122.9 Crores revenue for 6 months ending Sep-2020.
3) Employees of the company would get a discount of Rs 20 per share.
Risk Factors of investing in this IPO
These risk factors can impact company revenue and margins which would affect its share price. Investors should go through these points and understand them before investing.
1) Its margins have fallen in the last 3 years. It was generating 15.5% margins in FY18 Vs 6.4% in FY20. However, it generated 29% margins for 6 months ending Sep-2020. One should check whether such margins are consistent for subsequent quarters.
2) The company depends on 3rd parties to manufacture its products. If such 3rd party organizations are unable or unwilling to manufacture their products, company business would get affected
3) They depend heavily on channel partners such as third party e-commerce players, distributors and retailers. If there is any failure to manage the distribution network, it would adversely affect company performance.
4) They are dependent on maintenance of existing product lines and service relationships, market acceptance of new product and service introductions and innovations for revenue and earnings growth. If the company is unable to obtain or maintain and enforce such intellectual property protection for their technology solutions, company ability to commercialize such technology or solutions may be compromised
5) Its products and services are highly sophisticated and specialized. Any major failure or similar event could affect its business
6) If the company is unable to maintain its brand value or enhance its brand value, its business could suffer
7) For complete internal and external risk factors, you can refer the RHP of the company.
Nureca Limited IPO Promoter Holding – Pre and Post IPO
Pre-issue share holding – 46.67%
Post issue share holding – Would be updated
Nureca Ltd IPO GMP today
This section would be updated when accurate info is available.
Nureca Limited IPO Tentative Dates / Timetable (Including Listing date)
|Nureca IPO Schedule|
|Finalization of Allotment||23-Feb-21|
|Initiation of Refunds||24-Feb-21|
|Credit to Demat Account||25-Feb-21|
|IPO Shares Listing Date||26-Feb-21|
Nureca Limited IPO price valuations
While Nureca IPO news was there for some time, its issue price has been announced recently. Here is how the valuations look like.
1) On the upper price band of Rs 400 and EPS of Rs 9.14 for FY20, the P/E ratio works out to be 44x.
2) For last 3 years EPS of Rs 8.28, the PE ratio is 48x.
3) If we annualize its 6 months ending Sep-20 EPS, the P/E works out to be 4x.
4) Means, the company is asking the upper price band of Rs 400 in the P/E range of 4x to 48x.
4) There are no listed peers in the same line of business, hence the issue price cannot be ascertained whether it is under priced or overpriced. If we consider 44x P/E for FY20, the issue is aggressively priced and if we consider only 6 months ending Sep-20, annualize for FY21 and consider the P/E of 4, the IPO premium is under priced.
Nureca Limited IPO – Should you invest?
Nureca Limited is a consistent growing healthcare and wellness products distributor in India. It has shown strong revenue in the last 3.5 years. However, its margins declined in the last 3 years. Its 6 months ending Sep-20 show high margins. There are chances that corporates would show high growth in margins, especially when they are coming up with special events like public issue of shares. If we keep this aspect aside and assume the margin growth is consistent and would continue, high risk investors can invest in this IPO for medium to long term.
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