IPO Update: Vaidya Sane Ayurved Laboratories Limited (Madhavbaug) IPO to Open Next Week; Check Out the Details

In the next week, another IPO is lined up to open for subscription in the primary market. Vaidya Sane Ayurved Laboratories Ltd. (VSAL), a one-of-a-kind medical service provider that aims to treat chronic illnesses such as heart disease, diabetes, hypertension, and obesity by combining technology with Ayurveda’s ancient therapeutic methods is bringing its initial public offer on 10th of February.

Vaidya Sane Ayurved Laboratories Limited (Madhavbaug)

Founded in 2006 with the goal of lowering heart disease mortality and morbidity, the Companu offers a variety of wellness items through its online site Madhavbaug Wellness, as well as an online tool called MIB Pulse App that assists heart patients.

Madhavbaug clinics provide healthcare services for the company. It has 274 clinics throughout Maharashtra, Madhya Pradesh, Gujarat, Uttar Pradesh, Goa, Karnataka, Delhi, and Chhattisgarh as of November 30, 2021. There are 52 company-owned clinics and 222 franchise clinics among them. The company also provides its patients with a holistic environment with 360-degree ecosystem.

Madhavbaug has a strong track record of patients who have received relief from life-threatening conditions as a result of Madhavbaug’s treatments, with more than a decade of experience in preventive cardiology.

The Madhavbaug IPO market lot size is 1600 shares. A retail-individual investor can apply for up to 1 lot (1600 shares or ₹116,800).

When:

The IPO opens on Feb 10, 2022 and closes on Feb 15, 2022.

• Fresh Issue: 2,771,200 Eq Shares of ₹10 (aggregating up to ₹20.23 Cr)
• Offer for sale: 2,771,200 Eq Shares of ₹10 (aggregating up to ₹20.23 Cr)
• Price band: Rs 73 per equity share.
• Face value: Rs 10 apiece.
• Lot size: 1600 shares
• Listing: NSE
• Listing Date: Feb 23
• Lead managers: First Overseas Capital Limited
• Promoters: Rohit Madhav Sane is the company promoter.

Objectives of the IPO:

The company aims to utilize the funds for following purpose:

• Funding Branding and Advertising expenses.
• Meet general corporate purposes.

Summary of Financial Information:

First Overseas Capital Ltd. is the only lead manager for the issuance, and Bigshare Services Pvt. Ltd. is the registrar. The company’s market maker is BHH Securities Pvt. Ltd.

In terms of financial performance, VSAL has reported turnover/net profits (loss) of Rs. 62.57 crore / Rs. 0.50 crore (FY19), Rs. 75.30 crore / Rs. – (0.56) crore (FY20), and Rs. 52.28 crore / Rs. 1.55 crore (FY21) (FY21). On a turnover of Rs. 31.57 crore, it achieved a net profit of Rs. 1.35 crore in the first half of FY22, which concluded on September 30, 2021. The dramatic increase in bottom lines over the previous 18 months appears to be window dressing to garner higher values before the IPO.

Despite the highest top line, it had a setback in FY20, and in the following fiscals, it posted larger profits despite a lower top line, which has raised suspicions. Furthermore, for the first half of FY22, it had a stellar performance, which appears to be a ruse to get a higher valuation.

The asking price is at a P/E of 28.29 if we annualize its FY22 performance with super profits and assign it to fully diluted post IPO equity, and it is at a P/E of 76.04 based on the last three years average EPS. As a result, the issue is overpriced.