NURECA LIMITED

Nureca Limited started in 2016 and based at Mumbai is a B2C company engaged in the business of home healthcare and wellness products. Company enables the customers with tools to help them monitor chronic ailments and other diseases, to improve their lifestyle. They believe in innovation and catering new products to the ever-growing needs of the home health care sector. They are a digital first company wherein they sell the products through online channel partners such as e-commerce players, distributors and retailer. Further, they also sell the products through their own website drtrust.in. Currently, 95% of revenues for Nureca come through digital channels (eCommerce). However, this poses an opportunity for Nureca to expand into the offline channel. To expand their business footprint, Nureca, in October 2019, joined hands with Croma, India's first omni-channel electronics retailer from the Tata Group, to emerge as the very first company to sell healthcare and wellness products through Croma stores. As part of this tie -up, Nureca will sell products from its Dr Trust and Dr Physio brands at 30 Croma stores across the country, and this would grow with the increasing adoption of the products. Currently, Company classifies the products portfolio under the following five categories such as(i) Chronic Device Products – which includes products such as blood pressure monitors, pulse oximeters, thermometers, nebulizers, self monitoring glucose devices, humidifier and steamers.(ii) Orthopedic Products – which includes rehabilitation products such as wheelchairs, walkers, lumbar and tailbone supports and physiotherapy electric massagers.(iii) Mother and Child Products – which includes products such as breast pumps, bottle sterilizers, bottle warmers, car seats and baby carry cots.(iv) Nutrition Supplements – which includes products such as fish oil, multivitamins, probiotics, botin, applecider and vinegar.(v) Lifestyle Products – which includes products such as smart scales, aroma diffusers and fitness tracker. As of March  2020, total installed production capacity of company was 60,000 and capacity utilisation of company is 20% till 30th June, 2021. As per financial performance, Nureca Limited has posted total income/net profits of Rs. 20.06 cr. / Rs. 3.11 cr. (FY18), Rs. 61.98 cr. / Rs. 6.22 cr. (FY19) and Rs 99.48 cr / Rs 6.39 cr (FY20). For upto H1 of FY21, company has posted profit of Rs 36.18 Cr on total revenue of Rs 122.97 Cr. So company has shown exceptional performance in H1 of FY21, but major concern is if company may continuously deliver similar performance in future or not. Nureca Limited has posted an average EPS of Rs. 8.28 and average RoNW of 77.69% for last three fiscals. Issue is priced at a P/BV of 5.42 as per NAV of 73.78 on 30.09.20. As per FY20 earnings, P/E is around 62.59. If we attribute latest annualised earnings of FY21 on fully diluted equity post issue, then asking price is at a P/E of around 5.53.  On BRLM's front, three BRLMs are associated with this IPO, and have handled one IPO in last three fiscals. IPO is opened below issue price . As of now, IPO is trading above issue price. ( As on 15.01.2021 ) As per financials, results are very good, RoNW is 77.69% for last three fiscals and issue looks fully priced with respect to FY20 earnings and cheaply priced as per annualised FY21 earnings. This industry of Healthcare and Wellness products is growing at good rate, and expected to grow at good rate for next couple of years. But this industry is highly competitive and fragmented and new players will come as market grow due to very low entry barriers. Performance of BRLMs are average. So we give NEUTRAL rating to this IPO and high risk taking investors may invest in this IPO.

• 1 Saurabh Goyal