Credent Connect N Care IPO (13-17 August) Analysis

IPO Analysis | NSE Emerge | 100% Book Built Issue (Pure Fresh Issue) | Regulation 229(2) and 253(1)

Based on Draft Red Herring Prospectus dated March 31, 2026 | Healthcare and Cold Chain Logistics for Diagnostic Labs | New Delhi

STATUS: DRHP FILED | PRE-SEBI OBSERVATION STAGE | ALL BID DATES AND PRICE BAND TO BE DETERMINED

Pure Fresh Issue of up to 49,68,000 Equity Shares | No Offer for Sale | No Listed Comparable Peer Exists | NSE Emerge Platform

PAT Declined for 2 Consecutive Years (FY23 to FY25) Before a Sharp H1 FY26 Rebound Driven by a New Subsidiary Acquisition | Extensive History of Past Companies Act Non-Compliances

 Credent Connect N Care Limited was originally incorporated as Credent Cold Chain Logistics Private Limited on June 25, 2015, renamed Credent Connect N Care Private Limited in May 2024, and converted to a public limited company on October 28, 2025. Its CIN is U63000DL2015PLC281994, with its registered office in Ashok Vihar, New Delhi. The Promoters are Ashok Kumar Sharma, Karan Sharma, Tarun Sharma, Dimple Sharma and Tanveen.

The Company provides healthcare logistics solutions to medical diagnostic laboratories and healthcare institutions, including temperature-controlled diagnostic sample transportation, home sample collection and related field services, supported by a cold chain enabled network across road, air and onboard courier services.

The Company itself states there are no listed companies in India with a directly comparable business model or scale, so investors cannot benchmark it against a similar listed peer, discussed further in Section 5.

The Company operates its offices, warehouses and branch premises from a mix of owned and leased or leave-and-license arrangements, and does not own the majority of these operational sites.

The Company's recent financial history shows 2 distinct phases. Revenue grew from Rs.5,975.37 Lakhs in Fiscal 2023 to Rs.7,794.26 Lakhs in Fiscal 2025, but PAT actually declined over the same period, from Rs.269.63 Lakhs to Rs.224.67 Lakhs, with RoE falling from 28.40% to 15.20%, a genuine 2 year profitability compression.

This reversed sharply in the 6 month stub period ended September 30, 2025 (Rs.9,002.96 Lakhs revenue and Rs.760.83 Lakhs PAT, not annualised, both already exceeding any full prior fiscal year), a rebound substantially explained by the April 2025 acquisition of Credent Healthcare Private Limited, now a wholly owned subsidiary whose financials are consolidated from that date.

This acquisition context, rather than organic operating improvement alone, is essential to understanding the stub period figures, and is discussed further in Section 4.

Key Basics

Particulars	Details
Document Type	Draft Red Herring Prospectus (DRHP) dated March 31, 2026. Pre-SEBI observation stage; all [TBD] items including Price Band and Bid dates remain undetermined.
Issue Structure	100% Book Built Issue, entirely a Fresh Issue of up to 49,68,000 Equity Shares (no Offer for Sale). Face value Rs.10 per share.
Face Value	Rs.10 per Equity Share.
Promoters	Ashok Kumar Sharma, Karan Sharma, Tarun Sharma, Dimple Sharma and Tanveen.
Selling Shareholders	Not applicable. This Issue is entirely a Fresh Issue; there is no Offer for Sale.
Eligibility Route	Regulation 229(2) and 253(1) of Chapter IX of the SEBI ICDR Regulations, 2018.
Listing Exchange	SME Platform of the National Stock Exchange of India (NSE Emerge).
BRLM	Hem Securities Limited.
Registrar	KFin Technologies Limited.
Bid or Issue Dates	Not yet determined; this is a DRHP at pre-SEBI observation stage.
Listed Peers, One Line	None. The Company states there are no listed companies in India engaged in a directly comparable business, so no industry accounting ratio comparison is provided.

The most structurally distinctive feature of this offer is that a large majority of the Fresh Issue proceeds are earmarked for investment into a recently acquired, wholly owned subsidiary (Credent Healthcare Private Limited) rather than the listing entity's own standalone operations, discussed in Section 3.

This places Credent Connect N Care alongside a small number of other companies in this report series, such as Aegeus Technologies and Anawil Wire and Engineering, where no meaningful listed peer benchmark exists at all.

How Will the IPO Money Be Used?

Object	Estimated Amount (Rs. Lakhs)	Substantiation
Investment in wholly owned subsidiary Credent Healthcare Private Limited to meet its working capital requirement	1,788.75	A specific rupee figure disclosed, backed by a working capital assessment based on the subsidiary's own audited financials for FY23 to FY25, certified by a Chartered Accountant. The subsidiary became a material subsidiary from April 2, 2025 and a wholly owned subsidiary on October 8, 2025.
Investment in wholly owned subsidiary Credent Healthcare Private Limited to finance its capital expenditure requirements for machinery	205.08	A specific rupee figure disclosed; the Company's own Risk Factors disclose that machinery orders for this Object have not yet been placed as of this DRHP.
To meet Working Capital Requirements (of the Company itself)	2,630.00	A specific rupee figure disclosed as a standalone Object, separate from the subsidiary working capital Object above.
Repayment and/or prepayment, in full or part, of borrowings availed by the Company	411.87	A specific rupee figure disclosed; the summary reviewed here does not include a lender-by-lender certified schedule.
General corporate purposes	[TBD]	Capped at 15% of Gross Proceeds or Rs.10 Crore, whichever is lower. No further breakdown provided, as is standard.

Investors should note that roughly Rs.1,993.83 Lakhs of the disclosed Rs.5,035.70 Lakhs specifically-itemised Objects (nearly 40%) is directed into the newly acquired subsidiary, Credent Healthcare Private Limited, rather than the listing Company's own pre-existing operations.

This is a reasonably well-substantiated Object in terms of the underlying working capital assessment (based on the subsidiary's own certified historical financials), but the capital expenditure component for machinery has not yet reached the firm order stage.

As this is still a DRHP, the Gross Proceeds, Net Proceeds and General Corporate Purposes figures all remain undetermined.

Financial Performance

P&L and Key Metrics (Rs. Lakhs unless stated)

Particulars	H1 FY26 (Sep 2025)	FY 2025	FY 2024
Revenue from operations	9,002.96 (H1, not annualized)	7,794.26	7,573.32
EBITDA	1,182.49 (H1)	499.48	429.63
EBITDA margin (%)	13.13 (H1)	6.41	5.67
Profit after tax	760.83 (H1, not annualized)	224.67	266.44
PAT margin (%)	8.45 (H1)	2.88	3.52
Return on equity (%)	32.36 (H1, not annualized)	15.20	21.62
Return on capital employed (%)	N/A	16.96	20.00
Return on net worth / RoNW (%)	32.36 (H1, not annualized)	14.13	19.51
Net worth	2,351.10	1,590.27	1,365.60
NAV per equity share (Rs.)	23.05	15.59	13.39

Cash Flow Highlights (Rs. Lakhs)

Particulars	H1 FY26 (Sep 2025)	FY 2025	FY 2024
Net cash from operating activities	1.41 (H1)	548.10	80.93
Net cash used in investing activities	(1,140.43) (H1)	(619.20)	(113.15)
Net cash from / (used in) financing activities	1,169.02 (H1)	(38.33)	216.49

This is one of the few genuine, unexplained-by-benign-factors margin compression stories in this report series prior to the most recent period: independently recomputed, revenue grew only 2.92% in FY25 (down from 26.71% growth in the prior comparison), while PAT actually declined in both FY24 (from Rs.269.63 Lakhs in FY23 to Rs.266.44 Lakhs, marginally) and more meaningfully in FY25 (to Rs.224.67 Lakhs), with RoE falling from 28.40% (FY23) to 21.62% (FY24) to 15.20% (FY25), a genuine 2 year deterioration in profitability and capital efficiency rather than a single-year dip.

This trend then reversed sharply in the 6 month stub period through September 30, 2025, with revenue, PAT, EBITDA margin and RoE all jumping well above any full prior fiscal year figure. The Company's own disclosure is important context here: on April 2, 2025, the Company acquired a controlling and, from October 8, 2025, wholly owned stake in Credent Healthcare Private Limited, and under applicable accounting standards, that subsidiary's financials are consolidated into the Company's results from the acquisition date.

This means the stub period improvement substantially reflects the addition of a new consolidated entity rather than organic improvement in the pre-existing standalone business, and investors should not assume the FY23 to FY25 profitability decline has necessarily been resolved at the level of the original core operations.

Operating cash flow was also unusually thin in the stub period (Rs.1.41 Lakhs) despite the large reported PAT, with investing and financing cash flows both swinging sharply, consistent with the cash effects of the acquisition itself.

How Does It Compare to Peers?

The DRHP states plainly that there are no listed companies in India engaged in a business model, scale of operations or service offering directly comparable to Credent Connect N Care's healthcare and cold chain logistics business, so no accounting ratio comparison with industry peers is provided.

This places the Company alongside a small number of others in this report series, such as Aegeus Technologies, Anawil Wire and Engineering, and Leap India, where no meaningful peer benchmark exists.

In the absence of a peer table, and given the acquisition-driven distortion in the most recent period discussed in Section 4, the Company's own multi-year standalone trend is a less reliable valuation reference point here than in most other reports in this series, and investors may wish to pay particular attention to how the Company separates organic and acquisition-driven performance in any updated RHP filed with the RoC.

Key Risks to Know Before Applying

l PAT declined for 2 consecutive years, from Rs.269.63 Lakhs in FY23 to Rs.266.44 Lakhs in FY24 to Rs.224.67 Lakhs in FY25, with RoE falling from 28.40% to 15.20% over the same period, before a sharp rebound in the 6 month stub period through September 2025 that is substantially attributable to the consolidation of a newly acquired subsidiary rather than confirmed organic improvement in the original business; investors should treat the stub period figures with this context in mind rather than as a straightforward continuation of a turnaround.

l The Company has an extensive history of past non-compliance under the Companies Act, 2013, including: non-filing of Form CHG-1 for a vehicle loan charge (Section 77 non-compliance); acceptance of loans from persons outside the permitted categories (Section 73 non-compliance, since fully repaid); loans and advances granted to related parties in non-compliance with Section 185; omission of the Cash Flow Statement from Form AOC-4 filings for 9 consecutive fiscal years (2015-16 through 2023-24); incorrect disclosures in several statutory filings (director appointment sections, resignation dates, share transfer and face value details); and past investments in chit funds (since fully withdrawn). While the Company states many of these lapses have been addressed, this is one of the more extensive compliance issue lists disclosed in this report series.

l Nearly 40% of this Offer's specifically itemised Net Proceeds is directed into a subsidiary (Credent Healthcare Private Limited) that only became wholly owned in October 2025, shortly before this DRHP, concentrating a large share of the capital raise in a still-new integration.

l Orders for the machinery underlying the subsidiary capital expenditure Object have not yet been placed as of this DRHP, leaving cost and timing execution risk open.

l The Company derives a significant portion of revenue from its top 10 customers without long-term contracts, and its business depends heavily on service-level contracts subject to renewal and renegotiation risk, concentrated in the healthcare and diagnostics sector specifically.

l The Company does not own the majority of its admin office, warehouse and branch premises, operating instead under lease or leave-and-license arrangements with third parties.

l The business is working capital intensive with trade receivables forming a significant portion of current assets, and is exposed to risks of loss, damage, contamination or delay in transportation of diagnostic samples, given the specialised, temperature-sensitive nature of the cargo.

l The Company is highly dependent on a large, geographically dispersed field workforce, and misconduct, fraud, negligence or theft by field personnel could adversely affect the business and reputation.

l Revenue is subject to seasonal fluctuations, with a significant portion generated in the second half of the fiscal year, and the Company depends on continuous availability of specialised packaging materials and consumables.

l There are outstanding legal proceedings involving the Company, its Directors and Promoters, and the Company carries contingent liabilities and commitments that could affect its financial position.

l The Company requires various approvals, licenses, registrations and permits to operate, some of which remain pending or in process as of this DRHP.

l Ownership is concentrated among the Company's Promoters, and conflicts of interest may arise with affiliated companies, the Promoter Group and other related parties.

Positives to Note

l The Company has proactively disclosed its full history of past Companies Act non-compliances in considerable detail, including matters as specific as omitted Cash Flow Statement attachments over 9 fiscal years, rather than providing only a general or vague disclosure, and states the underlying unauthorised loans have been fully repaid.

l The subsidiary investment Object is grounded in a specific, certified working capital assessment based on Credent Healthcare Private Limited's own audited historical financials (FY23 to FY25), rather than an unsubstantiated estimate.

l The Company operates in a specialised, differentiated niche (temperature-controlled healthcare and diagnostic sample logistics) with no directly comparable listed peer, which, while complicating valuation benchmarking, also suggests limited direct listed competition for this specific service offering.

l Despite the FY23 to FY25 profitability decline, the Company's Net worth and NAV per equity share both grew consistently across every period shown (Rs.1,099.16 Lakhs to Rs.2,351.10 Lakhs in Net worth; Rs.10.81 to Rs.23.05 in NAV per share), indicating the balance sheet continued to strengthen even as margins compressed.

l The Company has completed the acquisition of Credent Healthcare Private Limited to full ownership (100% as of October 2025) rather than leaving it as a partial or contested stake, giving it full operational control over the newly consolidated business going into this Offer.

l Operating cash flow, while thin in the stub period, was positive in every one of the 3 full fiscal years shown (FY23 through FY25), including a notably strong Rs.548.10 Lakhs in FY25 itself, the same year PAT declined, indicating cash collection held up better than reported accounting profit that year.

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