Laxmi Dental Limited
Laxmi Dental Limited
LAXMIDENTL
₹13,431/-
Min. Investment
33/- Shares
IPO Listing Details
Listed On
20-Jan-2025
Issue Price
₹428.00
Listing Price
₹ 542.00
Listing Gains
₹ 114.00 (+26.64%)
Min. Investment
₹ 13,431 /-
Apply Dates Range
13-Jan-25 – 15-Jan-25
Price Range
₹407 – ₹428
Lot Size
33
Issue Size
698.06Cr
Laxmi Dental Limited
Laxmi Dental Limited is a public limited company incorporated under the Companies Act, 2013, on July 8, 2004, with its registered office located at Office No. 103, Akruti Arcade, J.P. Road, Opposite A.H. Wadia High School, Andheri (West), Mumbai – 400058, Maharashtra, India. Its corporate office is situated at 301, A-wing, Interface-16, Mindspace, Malad (West), Mumbai – 400064. The company, identified by its Corporate Identity Number (CIN) U541507MH2004PLC147304, has undergone significant milestones, including a name change and conversion from a private to a public limited company, as evidenced by fresh certificates of incorporation dated July 24, 2024, and August 2, 2024, respectively. Laxmi Dental Limited is preparing for an Initial Public Offering (IPO) as detailed in its Draft Red Herring Prospectus (DRHP) dated September 12, 2024, which outlines a 100% Book Built Offer.
| Founded In | July 8, 2004 |
| Industry Type | Dental products and services |
| Managing Director | Sameer Kamlesh Merchant |
| P/E Ratio (post) | 94.6 |
| Price-to-Sales Ratio | — |
| EBITDA | ₹9.6 Cr |
| Return on Equity | 78.78% |
| Revenue Growth | 19.4% |
| Earnings per Share | ₹4.40 |
| Free Cash Flow | ₹8.15Cr |
| Debt-to-Equity Ratio | 0.74 |
Read More…
The company operates in the dental industry, focusing on dental laboratories and branded dental products. While the DRHP does not fully detail its business operations in the provided excerpts, references to an “Industry Overview” (Page 185) and “Our Business” (Page 247) suggest it is involved in the global and Indian dental markets, potentially manufacturing dental prosthetics, equipment, or offering dental clinic services. This is supported by its subsidiaries, such as Laxmi Dental Lab USA, Inc., Bizdent Devices Private Limited, and Signature Smiles Dental Clinic Private Limited, indicating a broad operational footprint. The company has commissioned an industry report titled “Global and Indian Dental Labs and Branded Products” by Frost & Sullivan (dated September 11, 2024), highlighting its strategic focus on market positioning.
Laxmi Dental Limited is promoted by Rajesh Vrajlal Khakhar (Chairperson and Whole-Time Director), Sameer Kamlesh Merchant (Managing Director and CEO), and Dharmesh Bhupendra Dattani (Chief Financial Officer), who are also among the selling shareholders in the IPO. The company’s management structure includes a mix of executive, non-executive, and independent directors, ensuring robust governance. It has a diverse corporate structure with direct subsidiaries, step-down subsidiaries (e.g., Illusion Dental Lab USA Inc.), a jointly controlled entity (Kids-E-Dental LLP), and an associate (ECGPlus Technologies Private Limited). Historically, it amalgamated with Illusion Dental Laboratory Private Limited in 2017, approved by the National Company Law Tribunal, Mumbai, reflecting strategic consolidation efforts.
Financially, the company provides restated consolidated financial information for FY 2022, 2023, and 2024 (Page 329), audited by M S K A & Associates, though specific figures are not detailed in the excerpts. The IPO aims to raise funds through a fresh issue and an offer for sale by promoters and investors like OrbiMed Asia II Mauritius Limited, with the total offer size and price band to be finalized later. The proceeds’ objectives are outlined under “Objects of the Offer” (Page 132), likely for expansion, debt repayment, or operational enhancements.
Laxmi Dental Limited collaborates with leading financial institutions like Nuvama Wealth Management, Motilal Oswal Investment Advisors, and SBI Capital Markets as Book Running Lead Managers, underscoring its ambition to tap capital markets. With a shareholder agreement dated January 21, 2015 (amended in 2024), it maintains structured investor relations. Positioned in a growing dental industry, the company aims to leverage its established presence and subsidiaries to enhance its market share through this IPO.
Shareholding Pattern
| Category | Before IPO % (pre-issue) | After IPO % (post-issue) |
|---|---|---|
| Promoters | 62.8% | 41.7% |
| Promoter’s Group | ~2-3% | ~0.5% |
| Public | ~34-35% | 57.8% |
| Total | 100.00% | 100% |
Promoter Holding Details
Total Promoter Holding: The DRHP does not specify individual promoter shareholdings pre- or post-IPO in the excerpts, but the OFS provides insight into shares sold. Post-IPO, the collective 41.7% is attributed to the three promoters.
| Promoter | Shares | Equity % |
|---|---|---|
| Rajesh Vrajlal Khakhar | ~67,13,890* | ~13.0%* |
| Sameer Kamlesh Merchant | ~1,03,43,152* | ~20.0%* |
| Dharmesh Bhupendra Dattani | ~45,14,026* | ~8.7%* |
| Total (Promoters) | 2,15,71,068 | 41.7% |
Pros
Market Leadership and Integration: Laxmi Dental is India’s only end-to-end integrated dental products company, offering a wide range of products like custom crowns, bridges, clear aligners, and pediatric solutions. It’s among the top two largest dental labs in India by FY23 revenue and the largest exporter of custom-made dental prostheses, serving over 95 countries and 22,000+ clinics (Web ID 9, DRHP Page 185). This vertical integration enhances control over quality and costs, positioning it strongly in the growing dental market.
Strong Financial Turnaround: The company transformed from a ₹4.16 Cr loss in FY23 to a ₹25.23 Cr profit in FY24, with revenue growing at a 19.4% CAGR (FY22-FY24) to ₹195.26 Cr (Web ID 16). Q3 FY25 reported a 33% YoY revenue increase to ₹61.6 Cr and a PAT of ₹4.8 Cr (X Post ID 1), showcasing resilience and operational efficiency.
Global Reach and Certifications: Operating six manufacturing facilities and serving markets like the US and UK, Laxmi Dental holds ISO 13485:2016 certification for quality management and MDR certification, ensuring compliance with international standards
Innovation and Technology: The company leverages advanced CAD/CAM workflows, 3D printing, and AI-driven portals, reducing human error and enhancing precision in products like Illusion Aligners and Zirconia crowns
High Return on Equity: Laxmi Dental’s FY24 ROE of 78.78% far exceeds peers like Poly Medicure (19.05%), reflecting exceptional profitability relative to shareholder equity. This metric highlights efficient capital utilization, appealing to investors seeking high returns.
Cons
High Valuation Concerns: Post-IPO, the P/E ratio stands at 82.72, down from 94.6x at the upper price band of ₹428, but still significantly higher than industry peers (e.g., Poly Medicure at ~50x). This suggests potential overvaluation, risking a correction if growth expectations falter.
Low Interest Coverage Ratio: Despite debt reduction (D/E ratio from 1.08 in FY23 to 0.74 in FY24), the company has a low interest coverage ratio, indicating limited ability to service debt with operating profits. This could strain finances if interest rates rise or earnings dip.
Promoter Stake Reduction: Promoter holding dropped from 62.8% pre-IPO to 41.7% post-IPO due to the OFS of 6,31,202 shares. An X post (ID 1) even suggests a further decline to 28.3% by February 19, 2025, raising concerns about promoter confidence and potential governance shifts.
Dependence on Other Income: FY24 earnings included ₹14.4 Cr in other income, a significant portion of the ₹25.23 Cr PAT. This reliance on non-core revenue streams could mask underlying operational weaknesses, posing risks if such income declines.
Negative Free Cash Flow: FY24 operating cash flow was ₹8.15 Cr (0.33x PAT), but investing activities consumed ₹14.44 Cr, implying negative free cash flow. This suggests heavy capital expenditure (e.g., new machinery, DRHP Page 132) that may not yet yield sufficient returns, straining liquidity.
Most Ask Questions?
What was the subscription rate of the Laxmi Dental IPO?
The IPO was subscribed 114.42 times overall by January 15, 2025. Retail investors subscribed 76.23 times, non-institutional investors (NII) 147.95 times (bNII 167.68x, sNII 108.49x), and qualified institutional buyers (QIB) 110.38 times. Earlier reports cited 26.57x, but final figures reflect strong demand.
When did the Laxmi Dental IPO open and close?
The Laxmi Dental IPO opened on January 13, 2025, and closed on January 15, 2025. The DRHP initially outlined the process, with final dates confirmed in the Red Herring Prospectus (RHP) and subsequent announcements.
What was the subscription rate of the Laxmi Dental IPO?
The IPO was subscribed 114.42 times overall by January 15, 2025. Retail investors subscribed 76.23 times, non-institutional investors (NII) 147.95 times (bNII 167.68x, sNII 108.49x), and qualified institutional buyers (QIB) 110.38 times. Earlier reports cited 26.57x (Web ID 1), but final figures reflect strong demand.
What was the listing price and performance on the debut day?
Laxmi Dental shares listed on January 20, 2025, at ₹428 per share on BSE and NSE, matching the upper price band. However, the stock fell 12.86% to ₹372.50 by close, indicating a weak debut despite a Grey Market Premium (GMP) of ₹126-₹165 suggesting a higher listing estimate (₹554-₹593).
What was the total issue size of the IPO?
The IPO size was ₹698.06 crore, comprising a fresh issue of 32,24,299 shares (₹138 crore) and an offer for sale (OFS) of 1,30,85,467 shares (₹560.06 crore) (DRHP Page 4). The fresh issue amount aligns with debt repayment and subsidiary investment goals (DRHP Page 132).
How were the IPO proceeds utilized?
The fresh issue proceeds (₹138 crore) were allocated for: (1) repayment/prepayment of borrowings (₹22.98 crore), (2) capital expenditure for subsidiary Bizdent Devices Private Limited (new machinery), and (3) general corporate purposes (DRHP Page 18). The OFS proceeds went to selling shareholders, including promoters and OrbiMed.
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer. The author has no business relationship with any company whose stock is mentioned in this article.