Nureca IPO: Raises Rs 44 crore from anchor investors; issue opens on Feb 15, should you subscribe?

The Rs 100-crore Nureca Ltd initial public offering (IPO), which is set to open for subscription next week, raised Rs 44.55 crore from two anchor investors on Friday, February 12, 2021. Nureca is a B2C company engaged in the business of home healthcare and wellness products finalised the allotment of 11.13 lakh equity shares to anchor investors at an upper price band of Rs 400 apiece (including a share premium of Rs 390 per share). According to a BSE circular, Nexpact Ltd invested Rs 34.55 crore against 8.63 lakh equity shares which is 77.55 per cent of the anchor investor portion. Next Orbit Ventures Fund invested Rs 10 crore for 2.50 lakh equity shares which comprise 22.45 per cent of the anchor investor portion. No trades were seen in the grey market for Nureca Ltd as the issue size is Rs 100 crore only.

Also read: Nureca IPO: Rs 100-crore public issue opens next week; check price band, bid lot size, other details

Should you subscribe to Nureca IPO?

Nureca IPO will close for subscription on February 17, 2021. The issue will be sold in the price band of Rs 396-400 apiece. The company enables its customers with tools to help them monitor chronic ailments and other diseases, to improve their lifestyle. Manan Doshi, Co-Founder, UnlistedArena.com dealing in Pre-IPO & Unlisted Shares, told Financial Express Online, recent performance reflects that the company has received a benefit from COVID-19 pandemic situation. But as the situation is normalising, such performance is difficult to sustain. However, the company has a good e-commerce adoption strategy which will help scale the business. “The tiny issue size will ensure huge oversubscription which in turn may pave a way for a decent listing debut of the company as the market sentiments are highly positive,” Doshi said.

Nureca operates in a highly fragmented market and given the huge opportunity in home healthcare segment, Vikas Jain, Senior Research Analyst, Reliance Securities, expects the growth momentum to sustain in subsequent years. “IPO is valued at 5.6x annualized earnings report in 1HFY21, which looks to be attractively valued given high asset turnover and return ratio of the company,” Jain added. On the back of attractive valuations and sizable opportunity, Reliance Securities has given a ‘subscribe’ rating to the issue.

Those at SMC Global Securities Ltd said that considering the P/E valuation, on the upper end of the price band of Rs 400, the stock is priced at pre issue P/E of 46.91x on its FY20 EPS of Rs 8.53. Post issue, the stock is priced at a P/E of 62.55x on its EPS of Rs 6.40. Looking at the P/B ratio at Rs 400 the stock is priced at a P/B ratio of 5.81x on the pre issue book value of Rs 68.86 and on the post issue book value of Rs 187.83 the P/B comes out to 2.13x. While on the lower end of the price band of Rs 396 the stock is priced at pre issue P/E of 46.44x on its FY20 EPS of Rs 8.53.

The equity shares of Nureca are proposed to be listed on BSE and NSE. The bids for the issue can be made for a minimum of 35 equity shares and in multiples thereafter.