The initial public offering of Nureca, a B2C company engaged in the business of distribution of innovative home healthcare and wellness products, is all set to close today. So far on the final day of the bidding, the issue has been subscribed over 23.38 times as per a report by Moneycontrol. Incorporated in the year 2016, the company has a strong focus on digital sales through online channel partners such as e-commerce players, distributors and retailers.
The company\’s flagship brand, Dr Trust offers products for monitoring chronic ailments, while orthopedic products are offered under the brand name of Dr Physio. Nureca also caters to users from the Mother and Child Care category with products under the brand name of Trumom.
As per the Red Herring Prospectus, the proceeds from the IPO will be utilized for meeting the working capital requirements of the business and for general corporate purposes.
Some quick facts about the Nureca IPO:
The price band for the Nureca IPO is set at Rs. 396 to Rs. 400 per share.
The minimum lot size is of 35 shares. An individual retail investor can bid for a maximum of 14 lots or 490 shares.
The issue size for the Nurcea IPO is Rs. 100 crores at the higher price band.
Shares of Nureca are expected to be listed around 26th February 2021.
Key strengths and opportunities
Diversified product portfolio targeted at multiple segments
Nureca offers a wide range of healthcare products such as blood pressure monitors, pulse oximeters, thermometers, nebulizers, self monitoring glucose devices, humidifier and steamers. The company also offers rehabilitation products such as wheelchairs, walkers, lumbar and tailbone supports and physiotherapy electric massagers.
In the Mother and Child Products category the company offers products such as breast pumps, bottle sterilizers, bottle warmers, car seats and baby carry cots. Besides these the company also offers nutrition supplements and products such as fish oil, multivitamins, probiotics, botin, apple cider and vinegar.
In the Lifestyle Products segment, Nureca offers products such as smart weighing machines, aroma diffusers and fitness trackers.
With a wide range of product offering the company caters to diverse age groups ranging from new born to the health concious middle-aged people as well as the elderly.
Increase in India\’s geriatric population
India\’s geriatric population (those aged above 65) is on the rise and is expected to reach 12.5% of the total population by 2026. People in this age group are more at risk of a higher prevalence of chronic diseases and requires regular healthcare monitoring.
Chronic Disease Products Market, by Revenue, by Product Type, 2019-2025E
Rising awareness and healthcare consumerism
Increasing health awareness among people has lead to an increased focus on fitness, well-being and preventive care. Prior to COVID19 pandemic, the online usage for healthcare purchases was growing at a high single digit growth rate. This trend has witnessed further growth after the onset of the pandemic and is likely to continue even in future.
Key challenges to consider while investing in Nureca IPO:
In its Red Herring Prospectus, the company has listed some factors which may impact the future performance of the company, such as:
Availability of counterfeit healthcare devices may impact company’s goodwill
Counterfeiting of the company’s health care devices by other companies and passed off as original, could adversely affect the company’s goodwill and results of operations.
Intense competition in the home healthcare segment
India’s home healthcare market is intensely competitive and is subject to rapid technological change.
Some of the major reasons for change in brand preferences in the home healthcare segment include product problems, physician advisories and safety alerts etc. Any changes in customer preferences as a result of the any of the above mentioned reasons could erode Nureca’s competitive advantage, thus affecting the company’s sales and market share.
Nureca’s competitors range from small start-up companies to larger companies with significantly greater resources and broader product portfolio. Introduction of products with advanced technology or enhancements by competitors could make the company’s products obsolete or less competitive.
Changes in domestic and foreign regulations pertaining to the sector
The home healthcare segment where the company operates is subject to stringent domestic and foreign applicable regulations. Any adverse regulatory action in future could adversely affect the company’s financial condition and business operations.