The ₹1,600 crore initial public offering (IPO) of Entero Healthcare Solutions opened for subscription on the 9th of February. On the first day, the issue was subscribed 10% across all categories. While this could be a case of investor hesitation, we can only know better when we understand the company, its financials, and its fundamentals. In this blog, we will explore the upcoming IPO in depth.
Entero Healthcare Solutions is a healthcare products distribution platform and in terms of revenue, stands among the top three distributors in the country. Although the company was formed in 2018, it has managed to widen its reach to 495 districts.
While retail investors have shown some enthusiasm, subscribing to 45% of their allocated portion, both non-institutional and qualified institutional buyers' segments remain significantly shy, leading to a 10% overall subscription of the IPO investment. This stands in stark contrast to the pre-IPO anchor investor allocation of ₹716 crore at the upper price band, suggesting a potential disconnect between the anchor and broader market sentiment.
The IPO itself is a two-chambered entity, comprising a fresh issue of ₹1,000 crore and an offer-for-sale (OFS) of ₹600 crore by promoters and existing investors in the price band of ₹1,195 - ₹1,258 per share. This OFS element, representing nearly 40% of the total offering, might send mixed messages to potential investors, raising questions about future growth prospects and promoter commitment.
Regardless of the final outcome, Entero Healthcare Solutions' IPO serves as a reminder that investing is not a walk in the park, especially when navigating the choppy waters of public offerings. Extensive research, careful analysis of company financials and market trends, and consultation with qualified financial advisors are vital before making any investment decisions. While an IPO can offer exciting prospects, it's equally important to remember the inherent risks involved.