Entero Healthcare Solutions

Entero Healthcare Solutions

Entero Healthcare Solutions, a healthcare product distributor, made a disappointing debut on the stock market today, listing at a 2.3 percent discount to its issue price of Rs 1,258 per share. The company had raised Rs 1,600 crore through its initial public offering (IPO), which was subscribed 2.8 times. The IPO comprised a fresh issue of Rs 1,000 crore and an offer for sale of Rs 600 crore by existing shareholders.

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Entero Healthcare Solutions IPO listing price may take place in ₹1,138 to ₹1,168 per share range, say experts.

The company had said that it would use the net proceeds from the fresh issue for repayment of debt, working capital requirements, and inorganic growth opportunities. Entero Healthcare Solutions is one of the leading players in the healthcare product distribution industry in India, serving over 73,700 pharmacies and 2,800 hospitals across 19 states.

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However, the company has been facing challenges such as high working capital requirements, low profitability, negative cash flows, and intense competition from other players. The company had reported a net loss of Rs 12 crore in FY23, compared to a net profit of Rs 11 crore in the trailing twelve months (TTM) period. Its return on equity (ROE) and return on capital employed (ROCE) were also low at 1.8 percent and 3.8 percent, respectively, in the TTM period.

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According to experts, the company’s valuation was also on the higher side, as it was trading at a price-to-earnings (P/E) ratio of 499 and a price-to-book (P/B) ratio of 3.3, based on the upper end of the price band. The company had offered a discount of Rs 119 per share to its employees, who were allotted 70,625 shares in the IPO.

The company’s future prospects depend on its ability to improve its operational efficiency, expand its geographical presence, leverage its technology platform, and pursue strategic acquisitions. The company also expects to benefit from the growth in healthcare spending and the consolidation of the healthcare distribution industry in India.

Source : mint

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