Nureca Limited IPO | 10 Things You Must Know

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Healthcare and wellness products distributor Nureca will open its initial public offering (IPO) for subscription on February 15. The company plans to raise Rs 100 crore through the issue, Let’s talk about it in brief.

Also Read : How to Apply for IPO online (step by step guide)

1) About:

Incorporated in 2016, Nureca Limited is a healthcare and wellness products distributor. The company aims to offer the best quality, durable, and innovative tools to customers to monitor chronic diseases to improve their lifestyle.

It is a digital-first company that sells its products through online channel partners like e-commerce platforms, distributors, and retailers, as well as through their website www.drtrust.in. Nureca has evolved as a one-stop solution provider in the home health market in India. 95% revenue comes from online sales.

Also Read : Opening an Account with RBI for Investing?

2) IPO Details:

It is a Fresh Issue of Equity Shares aggregating upto Rs 100 cr. A total of up to 75% of the net issue will be reserved for Qualified Institutional Buyers (QIB). And, up to 10% for retail investors and remaining 15% for the non-institutional category. Equity shares worth Rs 50 lakh will be reserved for eligible employees and these will be offered at a discount of Rs 20 per share for employees bidding in the employee reservation portion.

IPO Date: Feb 15, 2021 – Feb 17, 2021
Face Value: ₹10 per equity share
IPO Price: ₹396 to ₹400 per equity share
Market Lot: 35 Shares
Listing At: BSE, NSE
Finalisation of Basis of Allotment: Feb 23, 2021
Initiation of Refunds: Feb 24, 2021
Credit of Shares to Demat Acct: Feb 25, 2021
IPO Shares Listing Date: Feb 26, 2021

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3) Financials:

The company has shown impressive growth in sales in first six months of FY21 which may be mostly due to fear of COVID-19 pandemic and patients avoiding visiting hospitals and clinics which led to increase in sales.

The revenue from operations for the firm has grown at a CAGR of 122.68% during the last two years i.e through 2020 and net profit has grown at a CAGR of 43.35% in the same period.

95% revenue comes from online.

To expand their business footprint, Nureca, in October 2019, joined hands with Croma -India’s first omni-channel electronics retailer from the Tata Group, to emerge as the very first company to sell healthcare and wellness products through Croma stores. As part of this tie-up, Nureca will sell products from its Dr Trust and Dr Physio brands at 30 Croma stores across the country, and this would grow with the increasing adoption of the product.

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4) Shareholding Pattern:

Pre-issue : Promoter & Grp 93.33% and public 6.67%
Post issue: Promoter & Grp 70.00% and public 30%

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Source: https://www.sebi.gov.in/filings/public-issues/feb-2021/nureca-limited_49051.html

5) Brand Ambassador

Rohit Sharma is the brand ambassador of one of its top brands, Dr. Trust.

Image source: https://www.exchange4media.com/marketing-news/dr-trust-appoints-rohit-sharma-as-brand-ambassador-108696.html 

Also read: Decoding Technical Analysis for Traders & Investors.

6) Valuations:

P/E was 437 in FY2020, 39 in FY2021
P/B was 88  in FY2020, 54 in FY2021

RONW: 180% in 2018, 79% in 2019, 43% in 2020

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7) Online Vs Offline markets:

Company earns 95% revenue from online sale. Online market for chronic diseases products are expected to expand on a faster scale as post covid-19, people are unlikely to go out often for numerous tests.

8) Objects of the Issue:

The IPO proceed will be utilized towards following purposes:

  • To meet the working capital requirements of the business.
  • To meet general corporate purposes.

9) Pros.

  • Total Debt is only 8 crore.
  • Diversified product portfolio.
  • Experienced promoter and management team.
  • Strong online distribution network.
  • Premium quality healthcare and wellness products.
  • Post Covid-19, Industry investment will increase.

10) Cons.

  • The company is only 4 years old.
  • Assembling plant (in Chandigarh) is operating at 20% capacity.
  • Family dispute on Chandigarh plant.
  • Intense competition from unorganized players.

How to Apply for it?

This link will explain a step by step process to apply for the IPOs in India.

Suggestion: Only high risk investor should apply for ‘one lot’. (minimum investment : 14,000 Rs.)

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Data source: Bloombergquint, ET, financialexpress and BusinessLine

Akshay Seth
Research Analyst (SEBI Regd.)
Linkedin | akshay.equity@gmail.com

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MarketNotes.in

MarketNotes.in

Akshay Seth is a SEBI Registered Research Analyst. Has taken sessions on 'Equity Analysis' in IIT Madras, IIT Delhi, IIT Guwahati, IIT Mandi, NMIMS Mumbai. Can be contacted for Stock Advice and Learning Stock Analysis (Fundamental & Technical). +91 8826423141 | info@equityboxx.com
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