Entero Healthcare IPO: All You Need To Know
The proceeds from the issue will be used for repayment/prepayment of borrowings, funding of long-term working capital requirements, pursuing inorganic growth and general corporate purposes.
Healthcare products distributor Entero Healthcare Solutions Ltd. is launching its initial public offering on Friday.
The IPO is for Rs 1,600 crore, comprising a fresh issue of Rs 1,000 crore and an offer for sale of 47.7 lakh shares, which would be around Rs 600 crore.
The price range for the IPO is Rs 1,195 to Rs 1,258 per share, with a minimum application lot size of 11 shares.
Of the total IPO size, 75% is reserved for qualified institutional buyers, 10% for retail individual investors, and the remaining 15% is to be allotted to non-institutional investors.
Issue Details
Issue opens: Feb. 9.
Issue closes: Feb. 13.
Total issue size: Rs 1,600 crore.
Face value: Rs 10 apiece.
Fixed price band: Rs 1,195-Rs 1,258 per share.
Minimum lot size: 11 shares.
Listing: NSE and BSE.
Use Of Proceeds
The net proceeds from the issue will be utilised towards:
Repayment/prepayment, in full or part, of certain borrowings availed by the company.
Funding of long-term working capital requirements of the company and its subsidiaries during FY25 and FY26.
Pursuing inorganic growth initiatives through acquisitions.
General corporate purposes.
Business
Incorporated in 2018, the company was among the top three healthcare product distributors in India in terms of revenue in FY22, according to Crisil.
Entero provides healthcare product manufacturers access to a large number of pharmacies, hospitals and clinics throughout the country, through a single organised, pan-India, technology-driven and integrated healthcare products distribution platform and by setting up warehouses and logistics services.
It has a nationwide presence of 77 distribution warehouses, located across 38 cities in 19 states and union territories, and a customer base of over 73,700 pharmacies and 2,800 hospitals spread across 501 districts, as of Sept. 30, 2023.
For the pharmacies, hospitals and clinics associated with the company, the platform acts as a one-stop solution for their procurement needs.
Risk Factors
The company has experienced negative cash flows in the past and net loss in FY21, FY22, and FY23.
It does not have long-term agreements with customers and there is risk of termination of relationships without notice.
Any disruption to the operation of warehouses, or to the development of new warehousing and logistics facilities, could have an adverse effect.
It might be adversely impacted by competition and industry consolidation.
Company may be adversely impacted by changes or disruptions in product supply, which may lead to a loss of customers.
Company's private label business may not be successful and may hinder relationships with retail pharmacies/customers.
Subsidiaries have availed unsecured loans in the form of loan from their directors or intercorporate deposits, which could be recalled at any time.
There are outstanding legal proceedings involving subsidiaries, directors and promoters.
