Galaxy Medi NSE SME IPO review

•    The company is engaged in the manufacturing and trading of medical devices, PoP Bandage. And other surgical dressing products.
•    The company marked growth in its top and bottom lines for the reported periods.
•    It has to its credit registration of 25 trademarks for domestic markets.
•    Based on its recent financial data, the issue appears aggressively priced.
•    Well-informed investors may park moderate funds for medium term.

ABOUT COMPANY:
Galaxy Medicare Ltd. (GML) is into the manufacturing, trading and exporting of Medical Devices, Plasters of Paris Bandages (POP Bandage) and Other surgical dressings in India. The Company is certified under ISO 13485:2016 and Certificate of Conformity from EC International Certifications Standard (CE) for the Manufacturing and selling of Plaster of Paris Bandage and other surgical Dressings. Its manufacturing facility, situated at Mancheswar Industrial Estate, Bhubaneswar strictly adheres to ISO guidelines. Over the years, the company has established its presence in India and in international markets by offering a wide range of quality consumer products.

The company focuses on maintaining strong relationships with the clients and collaborating with them to address their requirements. Over the past three decades, it has established long-term partnerships with clients, including domestic brand owners, and also supply products to clients in Bangladesh and Nepal. These connections highlight its focus on delivering reliable products and services across borders. GML’s manufacturing facility has established dedicated teams actively involved in product development cycle which involves research, ideation, concept development, prototyping, testing and launching in the market, Quality Control (QC) and Quality Assurance (QA) Lab activities. These functions have streamlined production and post-production processes and enabled it to support growth strategy by developing new products and processes that enhance its product range. 

The company offers a range of Plaster of Paris Bandages (POP Bandages), medical tapes and bandages, other surgical dressings, and external preparations for wound care and wound management. With a portfolio of 27 registered trademarks in India under various brand names, it caters extensively to both domestic and international markets. Its products are widely accepted by the medical fraternity and are supplied all over India to Central and State Government Health Departments, Corporate Hospitals and private players. Plaster of Paris Bandage B.P., and Elastic Adhesive Bandage B.P. are the two dominant products adding to its total revenue to the tune of around 57% and 32% for FY25. The company has registered 25 trademarks in India for its products brands. As of the date of this offer document, it had 196 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its book building route maiden combo IPO of 4132000 equity shares to mobilize Rs. 22.31 cr. (at the upper cap). The IPO consists of 3308000 fresh equity shares (worth Rs. 17.86 cr. at the upper cap), and an Offer for Sale (OFS) of 824000 equity shares (worth Rs. 4.45 cr. at the upper cap). The company has announced a price band of Rs. 51 – Rs. 54 per share of Rs. 10 each. The IPO opens for subscription on September 10, 2025, and will close on September 12, 2025. The minimum application to be made is for 4000 shares and in multiple of 2000 shares thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. The issue constitutes 27.23% of post-IPO paid-up equity capital of the company. From the net proceeds of the issue, the company will utilize Rs. 4.89 cr. for capex on purchase of machinery for existing plant, Rs. 8.94 cr. for working capital, and the rest for general corporate purposes.

The IPO is solely lead managed by Affinity Global Capital Market Pvt. Ltd., while Cameo Corporate Services Ltd., is the registrar to the issue. Prabhat Financial Services Ltd., is the market maker. The IPO is underwritten to the tune of 15% by Affinity Global and 85% by Prabhat Financial Services.

The company has issued initial equity shares at par, and issued further equity shares in the price range of Rs. 25 – Rs. 50 between March 2011, and June 2021. It has also issued bonus shares in the ratio of 1 for 1 in October 2008, 2 for 3 in August 2015, and 29 for 10 in March 2024.The average cost of acquisition of shares by the promoters/selling stakeholders is Rs. 0.79, Rs. 1.12, Rs. 1.40, Rs. 1.54, and Rs. 1.84 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 11.86 cr. will stand enhanced to Rs. 15.17 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 81.93 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted total Income/Net Profit of Rs. 32.03 cr. / Rs. 1.57 cr. (FY23), Rs. 36.94 cr. / Rs. 3.71 cr. (FY24), and Rs. 40.27 cr. / Rs. 3.37 cr. (FY25). Surge in bottom lines for FY24 and fall for FY25 surprises one and all. It is operating in a highly competitive and fragmented segment.

For the last three fiscals, the company has reported an average EPS of Rs. 2.68, and an average RoNW of 19.32%. The issue is priced at a P/BV of 3.49 based on its NAV of Rs. 15.48 as of March 31, 2025, and at a P/BV of 2.26 based on its post-IPO NAV of Rs. 23.88 per share (at the upper cap).

If we attribute its FY25 earnings on post-IPO expanded equity base, then the asking price is at a P/E of 24.32, and based on its FY24 earnings, the P/E stands at 22.13. Thus, based on its recent financial data, the issue appears aggressively priced.

The company has posted PAT margins of 5.04% (FY23), 10.26% (FY24), 8.60% (FY25), and RoCE Margins of 14.08%, 25.17%, 22.38%, respectively for the referred periods. 

DIVIDEND POLICY:
The company has declared and paid a dividend of 5% (FY23), 5% (FY24), and 7.5% (FY25). It will adopt a prudent dividend policy, based on its financial performances and future prospects.

COMPARISON WITH LISTED PEERS:
As per offer document, the company has shown Adeshwar Meditex, KMS Medisurgi, as its listed peers. They are currently trading at a P/E of around 13.1, and 94.9 (as of September 08, 2025). However, they are not truly comparable on an apple-to-apple basis. This compare appears to be an eyewash.

MERCHANT BANKER’S TRACK RECORDS:
This is the 7th mandate from Affinity Global in the last three fiscals (including the ongoing one). Out of last 6 listings, 1 opened at discount, 1 at par and the rest with premium ranging from 5.88% to 51.79% on the date of listing.