Another new listing today and that is once again at a discount; Entero Healthcare got listed on the BSE at Rs.1245 v/s IPO price of Rs.1258 and is now trading at Rs.1217 levels.

The IPO had met with a very lacklustre response and that is what we are seeing in the listing too. Overall, the IPO was subscribed less than 2x of which QIB was at 2.28x, HNIs at 0.22x and Retail at 1.33x.

Entero Healthcare is a 7 year old B2B distributor of pharma products, of 1,900 manufacturers, to 80,000 retailers and 3,500 hospital customers, through 77 warehouses across 38 Indian cities. While it is among top 3 distributors based on revenue, slim gross margin of just 8% led to net loss for all 3 past fiscals i.e. from FY21 to FY23.

In our IPO Analysis, we had concluded - Distribution business clocking wafer thin margins lacks any moat making the IPO a clear avoid.