Security Diagnostics IPO: The mainboard initial public offering (IPO) of diagnostics chain major Security Diagnostics Ltd received a lukewarm response from investors on the first day of subscription. The medical services consultancy company’s public offering hit the India primary market on Friday, November 29, which will open for its three-day subscription period and close on Monday, December 3, 2024.
Suraksha Diagnostics Limited Company Details
The company provides comprehensive, integrated pathology and radiology testing solutions and medical consultation services. It leverages its wide operational network to serve customers effectively. This one-stop approach ensures convenience and access to the health care needs of all customers.
According to the Red Herring Prospectus (RHP), Suraksha Diagnostics’s listed peers include Dr Lal PathLabs, with a price-to-earnings (P/E) ratio of 77.08, Metropolis Healthcare, with a P/E of 89.61, Thyrocare, with a P/E of 65.52. , and Vijaya Diagnostics, with a P/E of 86.40.
Security Diagnostics has shown impressive growth, with its revenue increasing by 14.75 percent. More specifically, the company’s profit after tax (PAT) witnessed an extraordinary growth of 281.32 per cent between the financial years ending March 31, 2024 and March 31, 2023.
As of June 30, 2024, the operational network includes a major central reference laboratory and eight satellite laboratories at diagnostic centres. There are also 215 customer touchpoints, including 49 diagnostic centers and 166 sample collection centres, operated primarily through franchisees.
This extensive network extends to the states of West Bengal, Bihar, Assam and Meghalaya, facilitating efficient service delivery and increased access to diagnostic testing in the region. In the three months ending in 2024, the firm conducted about 1.58 million tests, serving about 280,000 patients. Notably, 95.34 percent of their revenue from operations was generated from their primary sector, which includes Kolkata and surrounding areas of West Bengal.
The hub-and-spoke model of the diagnostics industry, particularly in pathology, is a centralized approach to managing diagnostic testing and laboratory services. The central laboratory serves as the hub in this structure, where samples are received, processed and analyzed. Smaller satellite laboratories, or spokes, are responsible for collecting samples and transporting them to a central facility. This model streamlines operations, increases efficiency, and can lead to faster turnaround for test results, according to a recent CRISIL report.
