Laxmi Dental share price jumps 8% after bumper listing. Should you buy, sell or hold? | Stock Market News

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

Even after a strong start, the stock continued its momentum, gaining another 8% to reach ₹584. At 12:00 p.m., the stock was trading at ₹571.30 apiece.

This surge followed a strong investor response to the issue, which was oversubscribed by 114 times, with significant interest coming from the NII segment. The IPO received bids worth nearly ₹44,000 crore compared to the issue size of ₹698 crore.

The issue was a combination of a fresh issue of 0.32 crore shares aggregating to ₹138.00 crore and an offer for sale of 1.31 crore shares aggregating to ₹560.06 crore.

The company proposes to utilise the net proceeds from the fresh issue toward the repayment/prepayment, in full or in part, of certain outstanding borrowings, investment in certain subsidiaries for the repayment/prepayment of outstanding borrowings, funding capital expenditure for purchasing new machinery, and general corporate purposes.

Laxmi Dental Shares: Where are they headed?

Prashanth Tapse, Senior Vice President of Research and Research Analyst at Mehta Equities, noted that the listing of Laxmi Dental met expectations, reflecting premium valuations and a strong investor response.

“We believe the investors’ demand was on the back of the company being India’s only end-to-end integrated dental product company operating in a niche and growing dental solutions space commanding a higher valuation multiple. We believe Laxmi Dental is well-positioned to capture a significant share in the dental solutions space,” said Prashanth Tapse.

He suggested that conservative investors who received allotments might consider booking profits above expectations on the listing day, given the current volatile market conditions. However, he advised long-term investors to hold the stock despite potential short-term volatility and market risks. For non-allotted investors, he recommended accumulating shares if the stock experiences dip post-listing due to profit-booking attempts.

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

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

Thus, Masdekar recommends that investors who were allotted shares can consider holding their positions from a medium- to long-term perspective.

About Laxmi Dental

According to the company’s RHP report, Laxmi Dental is India’s only end-to-end 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 as part of aligner solutions, and pediatric dental products.

According to the F&S Report cited in the RHP, the company is among the top two largest dental laboratories in India by revenue for fiscal 2023, catering to both domestic and international markets, including the USA, UK, and Europe.

Among Indian dental labs, the company is the largest exporter in terms of export revenue for fiscal 2023, specialising in custom-made dental prostheses, primarily serving the US and UK markets. It is also the preferred partner for one of the largest Dental Service Organizations (DSOs) in the USA, with over 1,650 clinics.

With a presence of 20 years in the dental laboratory business, the company serves over 20,000 dental clinics, dental companies, and dentists between Fiscal 2022 and 2024.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.