Is Laxmi Dental IPO Good or Bad - Detailed Review

Laxmi Dental IPO is kicking off its initial public offering which will be open from January 13, 2025, to January 15, 2025. While considering applying for this IPO, certain questions may arise in your mind, including whether the Laxmi Dental IPO is good or bad, whether it is worth investing in this IPO, and so on. 

This article offers a comprehensive Laxmi Dental IPO review, covering its business operations and fundamental analysis to help you make an informed investment choice.

Laxmi Dental IPO Review

Laxmi Dental is India’s only integrated dental products company, offering custom-made crowns, clear aligners, and pediatric dental products. With over 20 years of experience, the company serves 95+ countries and 22,000+ clinics, showcasing its ability to capitalize on industry growth opportunities.

On the financial front, Laxmi Dental has demonstrated significant improvement. The company became profitable in FY 2024, driven by better operational efficiency, growing revenues, and improved profit margins through effective cost management.

However, despite its strengths, there are notable risks. These include reliance on specific regions for revenue, the need to expand its dental network, and the challenge of retaining skilled technicians, all of which could affect its operations and growth potential.

The IPO holds promise, as funds will be used to repay debt, invest in subsidiaries, and enhance operations. While it offers an attractive investment opportunity, potential investors should remain cautious given the associated risks.

This Laxmi Dental IPO review is supported by the overview we have provided below; please go through it to learn more

Company Overview of Laxmi Dental IPO

Incorporated in July 2004, Laxmi Dental is India’s only end-to-end integrated dental products company as of September 30, 2024, with over 20 years of experience. The company offers a diverse portfolio of products, including custom-made crowns, aligner solutions, thermoforming sheets, and pediatric dental products.

Laxmi Dental is one of the top two Indian dental laboratories and the largest, most profitable provider of vertically integrated B2B2C dental aligner solutions in Fiscal 2023, based on revenue and PAT margin.

The company has an extensive dental network across India and international markets, serving over 22,000 dental clinics, dentists, and companies from FY22 to September 2024. Furthermore, they are the largest exporter of custom-made dental prostheses, catering primarily to the US and UK. They have supplied dental products to over 95 countries globally and 320 cities across India from FY22 to September 30, 2024.

As of September 30, 2024, Laxmi Dental operates six manufacturing facilities: three in Mira Road and two in Boisar, both in the Mumbai Metropolitan Region, and one in Kochi, Kerala. Additionally, it has five supporting facilities with manufacturing capabilities in Mumbai (2), Delhi, Bengaluru, and Ahmedabad.

Industry Overview of Laxmi Dental IPO

The Indian custom-made crowns and bridges market is projected to grow from $1.4 billion in 2023 to $3.1 billion by 2030, reflecting an annual growth rate of 11.8%, which is significantly higher than the global market's growth rate of 8.0%.

Similarly, the Indian clear aligner market is expected to witness rapid expansion, increasing from $133.6 million in 2023 to $569.0 million by 2030 at an impressive annual growth rate of 23%, outperforming the global market’s growth rate of 15%.

The Indian pediatric dental crown market is also set for substantial growth, forecasted to rise from $63.9 million in 2023 to $164.8 million by 2030, with an annual growth rate of 14.5%, far exceeding the global market’s growth rate of 7.5%.

These figures highlight the strong growth potential of the Indian dental industry across multiple product categories.

Source: Laxmi Dental IPO RHP

Financial Overview of Laxmi Dental IPO

As per the RHP of the company Laxmi Dental’s revenue from operations increased from Rs. 136.84 crore in Fiscal 2022 to Rs. 193.55 crore in Fiscal 2024, primarily driven by higher sales of branded dental products and laboratory offerings.

The company’s EBITDA saw a significant jump, rising from Rs. 5.41 crore in Fiscal 2022 to Rs. 23.79 crore in Fiscal 2024. The EBITDA margin also improved notably, increasing from 3.96% to 12.29% over the same period. This growth reflects better operational efficiency, with revenues growing at a faster pace than operational expenses.

This improved operational performance helped the company achieve a net profit of Rs. 25.22 crores in Fiscal 2024, marking a turnaround from losses in previous financial years.

Additionally, key financial ratios showed remarkable improvement. Return on Equity (ROE) increased from a negative 60.47% in Fiscal 2022 to 78.78% in Fiscal 2024, while Return on Capital Employed (ROCE) improved from a negative 19.40% to 19.97%, highlighting enhanced profitability and efficient capital utilization.

Strengths and Risks of Laxmi Dental IPO

Let’s dive into the strengths and weaknesses to assess if Laxmi Dental IPO is good or bad for investors

Strengths:

• India's only integrated dental products company, with 20+ years of experience and a strong dental network, offering a diverse range of products including custom-made crowns, clear aligners, thermoforming sheets, and pediatric dental products.

• Laxmi Dental is well-positioned to leverage industry tailwinds, the company has built a trusted brand with a comprehensive portfolio catering to various dental needs.

• The company is the second-largest player in India's dental lab market and the largest exporter, driven by the growing adoption of digital dentistry.

• Laxmi Dental has built a strong network, reaching 22,000+ dental clinics, companies, and dentists. It serves both domestic and global markets, exporting to 95+ countries and operating in 320 cities across India.

Risks:

• The company’s success depends on expanding its dental network, gaining recommendations from it, and increasing spending from clinics, companies, and dentists. Failure in these areas could impact its revenue and financial performance.

• Their business is heavily dependent on specific regions, both globally and domestically. Any loss of business in these key areas could negatively impact their operations, revenue, and overall financial health.

• Their business depends on skilled dental technicians and lab staff. Difficulty in hiring, retaining, or managing them could negatively affect their operations, growth, and financial health.

Strategies of Laxmi Dental IPO

• The company plans to expand its Dental Network by enhancing sales and marketing efforts, promoting digital technologies through dedicated sales teams, investing in product improvements, adopting new technologies, running targeted advertising campaigns, and providing regular training to its network.

• They plan to boost sales of Illusion Aligners and Illusion Zirconia crowns by expanding their Dental Network and securing more distributor partnerships in India and internationally for Taglus products.

• They plan to improve their existing dental products and introduce new ones to meet the changing needs of dental professionals and patients. This will help them to grow their network, attract new dentists and clinics, and increase their share of their business over the coming years.

• Laxmi Dental aims to enhance operational efficiency by integrating advanced technology and automation into its processes. Upgrading to superior machines will streamline operations and improve overall productivity.

• They plan to use multiple marketing channels to boost patient visits to their Dental Network. They believe that their multi-channel promotional strategies help them to improve awareness about dental health and products. 

Laxmi Dental Vs Peers

Let’s conduct a peer comparison to assess whether it’s worth investing in Laxmi Dental IPO:

Laxmi Dental’s total income stands at Rs195.26 crore, and its Earnings Per Share (EPS) is Rs 4.80, which is significantly lower than Poly Medicure’s Rs 1,434.54 crore and Rs 26.92, respectively. Similarly, Laxmi Dental’s Net Asset Value (NAV) per share of Rs 8.63 falls behind Poly Medicure’s figures.

However, where Laxmi Dental truly shines in its impressive Return on Net Worth (RONW) of 78.78%, reflecting its ability to generate exceptional shareholder returns and demonstrate strong operational efficiency.

Objectives of Laxmi Dental IPO

• Repay or prepay outstanding borrowings.

• Invest in subsidiaries to clear their borrowings.

• Purchase new machinery for the company.

• Invest in Bizdent Devices Pvt. Ltd. for machinery and capital expenditure.

• Cover general corporate expenses.

Laxmi Dental IPO GMP

Investors often check the Laxmi Dental IPO GMP for market sentiment and listing price hints. However, GMP doesn’t reflect financial strength, so a financial analysis is crucial before investing.

Laxmi Dental IPO Details

IPO Date

Laxmi Dental IPO is open to subscription from January 13, 2025, to January 15, 2025. The shares will be allocated to investors on January 16, 2025, and the company will be listed in the NSE and BSE on January 20, 2025.

IPO Issue Price

Laxmi Dental IPO is offering its shares in the price band of Rs.407 to Rs.428 per share. This means you would require an investment of Rs.14,124 per lot (33 shares) if you are bidding for the IPO at the upper price band.

IPO Size

The Laxmi Dental IPO is offering a total of 1,63,09,766 shares, amounting to Rs. 698.06 Crores. This includes an offer for sale of 1,30,85,467 shares, totaling Rs. 560.06 crores, and a fresh issue of 32,24,299  shares, totaling Rs. 138 Crores.

IPO Allotment Status

The shares from the Laxmi Dental IPO will be allotted to its investors on January 16, 2025. 

Click here to check the Laxmi Dental IPO allotment status.

IPO Application Link

Open a demat account with Rupeezy today and enjoy a seamless experience when applying for the IPO. With an easy-to-use platform, Rupeezy makes the IPO application process quick and hassle-free. Click on the apply link below to get started.

Apply for Laxmi Dental IPO

Conclusion

Laxmi Dental IPO offers a unique opportunity to invest in India's only integrated dental products company with a proven track record, robust operational efficiency, and significant industry tailwinds. The company is well-positioned to capitalize on the rapidly growing dental market with its diverse product portfolio. However, it is recommended that investors conduct thorough research before making an investment decision.