Nephro Care was founded in the year 2014 by Dr. Pratim Sengupta in Kolkata with an object of providing comprehensive medical services for renal patients. As on date, Nephro Care is a one stop treatment centre based in Kolkata that offers a wide range of clinical and lifestyle solutions and services and renal insufficiency treatment to patients. The treatment framework covers the entire range of lifestyle, physiological and spiritual aspects of wellness. Initially Nephro Care’s offerings were limited to dialysis and renal OPD services delivered through 3rd party facilities of hospitals like Sahid Khudiram Bose Hospital, Fleming Hospital and Dreamland Hospital. Hence, till November 2021, the company’s earnings were limited to only the share of revenue agreed upon between the 3rd party facility owner and the company. In December 2021, the company set up its own daycare unit at JC-18, Salt Lake with facilities for offering a wide range of services. The Company have entered into an agreement with e-Age Healthcare and taken up a dialysis unit (previously known as 'Dial a Dialysis') located at HB 113, Salt Lake City, Kolkata on a monthly rental model. Under the said agreement Nephro Care got the right to use the infrastructure and 11 dialysis machines available at the said premise. Nephro Care started operation at HB 113 from July 23 with their own staff and management. At present Company provides healthcare services to around 900 Chronic Kidney Disease Patients (CKD Patient) every month and engage over 5 permanent doctors along with 10 visiting consultants led by 70 experienced paramedical professionals from the flagship Salt Lake clinic with an area of 5,352 sq. ft. and three satellite clinics at Salt Lake (HB 113), Chandannagar, West Bengal (near Kolkata). Company has recently signed an agreement to take on lease an existing 60 bedded hospital at Madhyamgram, Kolkata and have embarked on a project to convert the same into a 100 bedded multi-speciality hospital and a part of the IPO proceeds is proposed to be utilised for the said purpose. Further, they are also in the process of opening 3 (three) more satellite clinics at the Alipurduar, Shyambazar in West Bengal & Balasore in Orrisa and the agreements for the space for these clinics is already be executed. As per financial performance, Nephro Care India Limited has posted total income / net profits of Rs 1.83 Cr / Rs 0.08 Cr (FY21), Rs 3.42 Cr / Rs (0.009) Cr (FY22), Rs 17.09 Cr / Rs 1.94 Cr (FY23) and Rs 19.89 Cr / Rs 3.40 Cr (Upto Q3 FY24). So as per previous financials data, company has shown good growth, but sudden rise in net-profit just before IPO raises doubts. Company has posted an average EPS of Rs 1.72 and average RoNW of 137.74% for last three fiscals. Issue is priced at a P/BV of 2.69 as per NAV of 33.47 as on post issue. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around (15140.57), 76.39 and 32.73 respectively, which looks aggressively priced. As per RHP, There are no listed peers. Corporate Capitalventures Private Limited is associated with this SME IPO and handled 12 SME IPOs and 1 Main board IPO in last 3 year. From last 10 SME IPOs, all opened above issue price or at par on the day of listing and From last 1 Main board IPO, that is opened above issue price on the day of listing. As of now from last 10 SME IPOs, all are trading above issue price and From last 1 Main board IPO, that is trading above issue price. (As on 26.06.24) As per financials, Nephro Care India Limited has shown good growth, RoNW is 79.68% and P/E is respectively (15140.57), 76.39 and 32.73 as per FY22, FY23 and annualized FY24 earnings. So, issue looks aggressively priced. Company is engaged into medical services for renal patients, which is highly competitive and fragmented business segment. Performance of BRLM is good. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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