Laxmi Dental’s share price rose 8% after bumper trading. Is it worth buying, selling or holding?

Stock market today: Laxmi Dental share price made a strong debut on the stock exchange on Monday, January 20, trading at ₹542 per share on NSE, representing a premium of 26.64% over the issue price ₹428. On the BSE, the shares opened at ₹528, 23.36% higher than the issue price.

Even after a strong start, shares continued to rise with another 8% to go ₹584. At 12:00 the company’s share price was approx ₹571.30 per piece.

This increase followed a strong investor response to the issue, which was oversubscribed 114 times, with significant interest from the NII segment. The IPO received offers worth approx ₹44,000 crore compared to the issuance volume ₹698 crores.

The issue was a combination of fresh issue of shares with an aggregate value of ₹0.32 crore ₹138.00 crore and offer for sale of shares worth ₹1.31 crore, in total ₹560.06 crores.

The Company proposes to use the net proceeds from the fresh issue for the repayment/prepayment, in whole or in part, of certain outstanding loans, investments in certain subsidiaries for the repayment/prepayment of outstanding loans, financing of capital expenditure for the purchase of new machinery, and general corporate purposes.

Laxmi Dental Shares: Where Are They Going?

Prashanth Tapse, senior vice president, research and analyst, Mehta Equities, noted that Laxmi Dental’s listing on the stock exchange met expectations, reflecting premium valuations and strong investor response.

“We believe investor demand was driven by the fact that the company was India’s only fully integrated dental products company, operating in a niche and emerging dental solutions industry, with a higher valuation multiple. We believe that Laxmi Dental is well-positioned to gain significant share in the dental solutions space,” said Prashanth Tapse.

He suggested that conservative investors who received allocations could consider booking profits above expectations on the listing day given the current situation unstable market conditions. However, he advised long-term investors to hold the stock despite potential short-term volatility and market risk. He advised unallocated investors to accumulate shares if the shares fall after listing due to attempts to book profits.

Prathamesh Masdekar, Research Analyst at Stoxbox, emphasized that Laxmi Dental’s strong market presence and expertise in manufacturing high-quality products position it well to build and scale future brands. Operating in the B2B2C model, the company has created an extensive dental network consisting of over 22,000 clinics, companies and dental dentists.

Masdekar pointed out that Laxmi Dental’s strong relationships with dentists, clinics and dental companies constitute a significant barrier to entry for new players in the Indian dental market. He also highlighted that factors such as shift from unorganized to organized sectors, increased awareness and adoption of dental aesthetics and growing preference for metal-free products are likely to drive the company’s growth.

Masdekar therefore recommends that investors who have been allocated shares should consider maintaining their positions in the medium to long term.

About Laxmi Dental

According to the company’s RHP report, Laxmi Dental is India’s only fully integrated dental products company as of March 31, 2024, offering a comprehensive portfolio of dental products. Its offerings include custom-made crowns and bridges, branded dental products such as clear aligners, thermoforming sheets, aligner-related products for onlay solutions, and pediatric dental products.

According to an F&S report cited in RHP, the company is among the top two dental laboratories in India in terms of fiscal 2023 revenue, serving both domestic and international markets, including the US, UK and Europe.

Among Indian dental laboratories, the company is the largest exporter in terms of export revenue in FY2023, specializing in custom-made dental prosthetics, mainly serving the US and UK markets. It is also a preferred partner of one of the largest dental service organizations (DSOs) in the United States, with over 1,650 clinics.

With 20 years of experience in the dental laboratory industry, the company serves more than 20,000 dental clinics, dental companies and dentists in fiscal years 2022-2024.

Reservation: : The views and recommendations presented in this article are those of the individual analysts. They do not represent the views of Mint. We advise investors to seek the opinion of certified experts before making any investment decisions.