Laxmi Dental Limited IPO: Check IPO Date, Lot Size, Price & Details

Business Overview:

Laxmi Dental Limited is an Indian end-to-end integrated dental products company. The company's offerings include:

• Custom-made crowns
• Bridges, branded dental products such as:
• Aligner solutions
• Thermoforming sheets
• Aligner-related products
• And Pediatric dental products.

It is among the top two largest Indian dental laboratories based on revenue for Fiscal 2024, and has a presence of over 20 years in the dental laboratories business. The company has a reach of over 22,000 dental clinics, dental companies, and dentists as of Sep 30, 2024.

It distributes and sells its products in more than 95 countries. The company has 6 manufacturing facilities, 3 of which are located in Mira Road, Mumbai.

IPO Details:

Objects of the Issue:

• Repayment of certain borrowings
• Investment in certain subsidiaries, for the repayment of their outstanding borrowings
• Funding capex.
• Investment in subsidiary, Bizdent Devices Pvt ltd, for funding capex.
• General Corporate Purposes

Strengths:

• Integrated Operations: It is the only end-to-end integrated dental products company in India, as of Sep-24, allowing them to have significant control over their supply chain and enables them to provide a comprehensive portfolio of dental products
• Market Position: It is the 2nd largest player in the domestic laboratory business and the largest export laboratory with increasing adoption of digital dentistry.
• Vertically Integrated and Diverse Product Portfolio: It has a diverse branded product portfolio. It is one of the few vertically integrated players globally, with backward integration including proprietary manufacturing of aligner sheets.
• B2B2C Business Model: The company uses a B2B2C model for its clear aligner sales, selling through a network of dental professionals to the end customer. This model helps build credibility, lowers marketing costs, and offers an economic advantage.
• Large Dental Network: It has a large dental network with a reach of over 22,000 dental clinics, dental companies, and dentists.

Risks:

• Customer Concentration and Lack of Long-Term Contracts: The company's dental network generally does not enter into long-term contracts or agreements, leading to potential pricing pressures.
• Lack of long-term supply orders of key raw materials and components from our suppliers increases the risk of pricing pressure.
• Risk from Supply chain disruption: As of Mar-24, 53.32% of Cost of goods sold are imported. Any disruption in the value chain would significantly impact the operations of the company.
• Under Insured: As of Sep-24, 77.47% of assets are insured i.e., in the event of any unforeseen situation the company would incur big outflow of economic resources.

Financial Highlights:

Conclusion:

Market Size of Indian Medical Device Segments is expected to grow from US $15.4 Bn to US $68 Bn from 2022 to 2030.

The company has recently turned positive at PAT level with a PAT margin of 12.8%, and improved it capital efficiency ratios.

However, considering the size of the market, operations of the company - earnings valuation of 89x seems to be high.

Therefore, we recommend to subscribe to this IPO for listing gains.