Incorporated in the year 2000, Nidan Laboratories and Healthcare Limited offer diagnostic services including radiology, neurology, cardiology, dental as well as pathology services. As of March 31, 2021, the company offered approximately 740 routine and 3000 specialized pathology tests and approximately 220 basic and 320 advanced radiology tests that cover a range of specialties and disciplines. The company provides pathology tests ranging from basic biochemistry and clinical pathology to cytogenetic and high-end molecular diagnostic tests, and radiology tests ranging from basic echocardiograms, X-Rays, and ultrasounds to advanced radiology tests including computerized tomography (CT) scans, magnetic resonance imaging (MRI) scans. The company also offers a broad spectrum of customized health and wellness packages to its customers and offers value-added services to its customers such as a home collection of specimens, house calls, and various delivery or access modes for test reports. Nidan has come out with a unique appointment booking mobile application under the name of "NIDAN HEALTHCARE" which is supported by self-indigenous software called "Nidan Operation Management (NOM)." This unique app enables patients to book appointments for any test, from anywhere, at any time. The company has also tied up with pathology partners like Metropolis Laboratories Limited for its services. Out of the 35 centers operating under the brand name of "Nidan Healthcare", 16 centers are under the Franchisee model where 1 center acts as a fully operated diagnostic center and 15 centers act solely as standalone collection centers. As of June 30, 2021, the company had a total of 213 employees. The company has got recognitions like the Best Diagnostic Chain of India Award 2019, in the Category of 20+ diagnostic centers by Express Healthcare. On the financial performance front, Nidan reported turnover/net profits (loss) of Rs. 209.72 Cr./ 2.23 Cr. (FY19), Rs. 221.91 Cr / 7.14 Cr. (FY20), Rs. 218.53 Cr. / 23.02 Cr. (FY21) and Rs. 78.46 Cr/ 10.87 Cr. (Q1FY22). So company has shown growth in bottom line, but top-line remained almost static. For the last 3 years, company has posted average EPS of Rs. 1.44 and RoNW of 0.11%. The issue is priced at a P/BV of 2.70 based on its NAV of Rs. 46.34 post issue. As per FY21 earnings and on post issue equity, IPO is valued at P/E of around 75.48 and as per FY22 annualised earnings P/E is 39.96 which looks aggressively priced. Comparison between listed peers in shown above table, but it can't be compared apple to apple basic. On BRLM's front, Beeline Broking Limited associated with this SME IPO and handled 9 IPOs in last 3 years. From last 9 IPOs, 3 opened below issue price and remaining above issue price. As of now from 9 IPOs, seven trading below issue price and remaining are trading above issue price. (As on 25.10.21 ) For Nidan, financials are average, RoNW is 0.11% and P/E is around 75 for FY21, so issue looks aggressively priced. Diagnostic sector is highly competitive and expected to grow at good rate next couple of years. Also, its very difficult to maintain such margins in future and fancy for diagnostic companies are fading now. Performance of BRLM is poor. So we give AVOID rating to this SME IPO.
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