Nureca Limited - IPO Note

Home Healthcare

Nureca Limited - IPO Note

Home Healthcare

Price range
Rs. 396 - 400
Issue Period:
Feb 15, 2021
Feb 17, 2021
February 12, 2021

Stock Info

CNX Nifty
Face value (Rs.)
Market lot
Issue size
Rs. 100 cr.
Public Issue
0.25 cr.
Market cap post IPO
Rs. 397 – Rs. 400 cr.
Equity Pre - IPO
0.75 cr.
Equity Post - IPO
1 cr.
Issue type
Fresh Issue

Shareholding (Pre IPO)

Source: Ace equity, StockAxis Research

Shareholding (Post IPO)

Source: Ace equity, StockAxis Research

Key Strengths

Asset-light Business Model
The business model of the company relies on its ability to design products, through optimal sizing from a suitable manufacturer/vendor and its long-standing relationship with vendors. The company enters into agreements with vendors who manufacture its products as per the company’s specifications, which allows it to scale operations quickly at a pre-determined cost and as per its quality standards without incurring any capital expenditure on manufacturing facilities. The company operates on an asset-light business model which does not require it to invest heavily on physical assets such as plant and machinery, land and property.

Quality and Innovation Focused
The quality is a pre-requisite for a positive consumer experience and long-term brand loyalty. In order to offer new and varied products to its customers, Nureca focuses on creating innovative products with an emphasis of quality and efficiency. Further, it focuses that the products are adhered to the stringent CE and FDA guidelines. Based on its experience, Nureca has focused on investing in experience-based product innovation that are most relevant in creating the consumer experience.

Combination of Technical Know-how and Understanding of Consumer Preference
The company believes that its brands i.e., Dr. Trust, Dr. Physio and Trumom have built a reputation of introducing innovative products. The company combines its technical know-how with an understanding of the Indian home healthcare market developed through market feedback and extensive interaction with its vendors. Through these efforts, the company seeks to be the first to introduce innovative products in the market.


The Home Health Market in India and neighbouring countries is estimated at Rs. 20,757.0 crores in 2019 and is expected to grow to Rs. 38,920.7 crores by 2025 at a CAGR 11.0%. Nutritional Supplements Segment forms ~86% of the total Home Health Market, followed by Chronic Disease Products segment at 6.5%. Highest growth is expected in Lifestyle products, especially Fitness trackers, at CAGR 14.5%, but the other product segments are also growing at robust, similar growth rates between 2019 and 2025.

Growth Drivers for Home Healthcare Market and Product Adoption:

  • Rising awareness and healthcare consumerism: Private healthcare companies carry out various health awareness programs as part of their marketing activities, which have led to increase in health awareness levels with people focusing more on their fitness, health and well-being which leads to increase in adoption of home health devices.
  • Increasing income levels: Affordability of Indians is expected to multiply in coming years. This increase in affordability and disposable personal income has created a large middle-class population which might aid to sustain demand for health devices and services.
  • The Covid-19 pandemic and focus of reducing hospital induced infections: Home healthcare helps reduce hospital visits, thereby reducing hospital induced infections. While the effort to reduce hospital acquired infections is a continual battle, the Covid-19 pandemic and fear of infection has pushed people towards virtual visits and home health products where hospitalization was not necessary.
  • Cost optimization pressures for healthcare providers: Healthcare providers aim to discharge patients with the home health devices supporting monitoring. The basic parameters including heart rate, oxygen saturation, respiratory rate, skin temperature, ECG readings, non-invasive blood pressure can be monitored using remote devices or mobile Health solutions. The hospitals and insurance companies benefit from remote monitoring and reduced adverse events.

Restraints to Growth for Home Healthcare Market and Product Adoption:

  • Fragmented and unorganized market: The Home Healthcare Market in India is highly fragmented, with proliferation of local companies, constituting large unorganized sector. Lax regulations and poor compliance in the unorganized sector have led to flooding of poor quality of products in the market. Additionally, the high number of players leads to high competition and pricing pressures, which in turn, results in reduced margins and scalability issues.
  • Uncertainty about accuracy of results: Home health products, even from reputed companies, are considered consumer grade, leading to concerns regarding accuracy measures with the product. This is a major concern for clinicians, and they are often deterred from recommending home healthcare products.
  • Lack of education and digital awareness: Rural regions have the lowest probability of adoption/ adherence of home healthcare products. Lack of education of patients and family caregivers is a major barrier towards effective training required for home healthcare products. Poor access to care, prevents people from taking the clinician support to train with usage and hence both adoption and adherences is reducing and scalability is much slower.


  • The company operates in extremely fragmented Indian Home Healthcare Market with proliferation of local companies, constituting large unorganized sector. Lax regulation and poor compliance in the unorganized market has flooded the market with poor quality products. The high number of players leads to high competition and pricing pressures, which in turn, results in reduced margins and scalability issues.
  • The company depends on third party manufacturers to manufacture its products. If these organizations are unable or unwilling to manufacture the products or fail to comply with FDA or other applicable regulations, the business of the company will be adversely affected.
  • Currently, the revenues are largely generated from selling third-party/assembled imported devices. Any change in government policies, will affect the business and profitability of the company.
  • The company depends heavily on its channel partners such as third-party e-commerce players, distributors and retailers and failure to manage the distribution network efficiently will adversely affect the company’s performance.
  • The Promoter, members of the Promoter Group and some of the company Directors have been subject to a ‘search and seizure’ operation by the income-tax department.

Company Description

Nureca Limited (Nureca) is a B2C company engaged in the business of home healthcare and wellness products. The company enables its customers with tools to monitor chronic ailments and other diseases. It is a digital-first company wherein it sells products through online channel partners such as e-commerce players, distributors and retailers. Further, it also sells the products through its website It provides a product mix to the customers and their preferences thereby targeting a wider customer base.

Currently, Nureca classifies its products portfolio under the 5 categories such as:

  • Chronic Device Products – blood pressure monitors, pulse oximeters, thermometers, nebulizers, self-monitoring glucose devices, humidifier and steamers.
  • Orthopaedic Products – rehabilitation products such as wheelchairs, walkers, lumbar and tailbone supports and physiotherapy electric massagers.
  • Mother and Child Products – breast pumps, bottle sterilizers, bottle warmers, car seats and baby carry cots.
  • Nutrition Supplements – fish oil, multivitamins, probiotics, biotin, apple cider and vinegar.
  • Lifestyle Products –smart scales, aroma diffusers and fitness tracker.


The company operates in a highly fragmented and competitive industry where numerous unorganized players along with various multinational brands compete, which results into pricing pressure and Nureca is no exception to this scenario. Further, we believe that due to the Covid-19 pandemic, the home healthcare products witnessed a surge in demand which reflects in the company’s performance during H1FY21, however as people will come out of this pandemic, the demand scenario may not sustain going forward which may in turn affect the performance of the company. Further, current revenues are largely generated from selling third-party/assembled imported devices and any change in the Government policies may impact the business. The company's own assembling plant operates at only 20% capacity utilization with a team of just 4 employees. At the higher price band of Rs. 400, the issue is valued at 44x/8x of FY20/H1FY21 EPS.

Key Information

  • Use of Proceeds: The net proceeds are proposed to be utilised towards funding incremental working capital requirements and general corporate purposes.
  • Book running lead managers: ITI Capital Limited
  • Management: Saurabh Goyal (Chairman and MD), Aryan Goyal (CEO) and Sakshi Mittal (CFO).

Financial Statement

Profit & Loss Statement:- (Standalone)

Particulars (Rs. Crores) FY 2018 FY 2019 FY 2020 H1 FY 2021
Net Sales 20.05 61.90 99.43 122.15
COGS 11.11 40.15 64.60 47.89
Gross Profit 8.94 21.74 34.82 74.26
Gross Profit Margin (%) 0.45 0.35 0.35 0.61
Employee Benefit Expenses 0.36 0.89 3.16 1.09
Other Expenditure 4.21 11.80 21.97 23.99
EBITDA 4.38 9.06 9.69 49.18
EBITDAM(%) 21.82% 14.63% 9.75% 40.26%
Depreciation 0.01 0.06 0.37 0.18
Earnings Before Interest and Tax 4.37 9.00 9.32 49.00
EBITM (%) 21.79% 14.54% 9.37% 40.12%
Interest 0.06 0.24 0.77 1.18
Other Income 0.02 0.09 0.06 0.83
Profit Before Tax 4.32 8.84 8.61 48.65
Tax 1.21 2.62 2.21 12.47
Profit After Tax 3.11 6.23 6.40 36.18
PATM (%) 15.52% 10.06% 6.43% 29.62%
Earnings Per Share 4.45 8.89 9.14 51.69