Laxmi Dental redirects Rs 48.1 crore to owned facilities

Laxmi Dental Limited has won shareholder approval to redirect Rs 48.1 crore of unutilised initial public offering proceeds into self-owned dental laboratory and aligner manufacturing facilities, with deployment planned across FY27 and FY28. Above Rs 27 crore is allocated to land and construction, while above Rs 21 crore is intended for machinery, computer equipment and other movable assets.

Why did Laxmi Dental redirect its IPO proceeds?

Laxmi Dental said on its November 4, 2026 earnings call that shareholders approved revised IPO objects and an extension of the utilisation timeline for Rs 48.1 crore of unutilised proceeds. Management said the funds will now finance owned manufacturing infrastructure for its dental laboratory and aligner businesses rather than a larger funding programme.

The operating rationale is a planned shift from leased, vertically arranged units in Mira Road to a self-owned, purpose-built horizontal integrated facility. Management said the existing premises have supported the business so far, but growing scale and operational complexity require a setup that can consolidate activities, improve workflow and provide capacity for the next phase of growth. Spending is planned through FY27 and FY28.

The decision followed a quarter of higher reported revenue and earnings before interest, tax, depreciation and amortisation, or EBITDA. Revenue from operations was Rs 79.5 crore in Q2 FY27, compared with Rs 72.3 crore in Q2 FY26, while EBITDA rose 38.5% year on year to Rs 15.3 crore. Management linked the revised use of proceeds to capacity and efficiency needs.

How will Laxmi Dental spend Rs 48.1 crore of IPO funds?

Laxmi Dental plans to spend above Rs 27 crore on acquiring land and constructing the building and related infrastructure for dental laboratory and aligner manufacturing facilities. The November 4 call did not disclose the site, land area, construction completion date or a separate allocation to either manufacturing line.

Above Rs 21 crore is earmarked for machinery, computer equipment and other movable assets for existing and new facilities. Management did not provide an itemised equipment list, capacity addition or production ramp timetable, but said both allocation buckets will be deployed across FY27 and FY28.

The stated plan is separate from capital expenditure already incurred. Laxmi Dental spent about Rs 16.7 crore on capital expenditure during H1 FY27 and reported Rs 97 crore of cash and bank balances, including fixed deposits and other investments, as of September 30, 2026. Management also said the balance sheet remained debt-free at that date.

What will Laxmi Dental’s owned facility change?

Laxmi Dental expects the owned facility to consolidate domestic laboratory and aligner manufacturing currently spread across several leased Mira Road units. Management said the horizontal integrated layout is intended to improve workflow and efficiency, while providing capacity and scalability. These are management’s expected outcomes, not disclosed savings or capacity targets.

Management expects a gradual move from the old plant to the new plant to be completed by the end of FY28. Laxmi Dental said the phased transition is designed to avoid affecting regular operations, but did not quantify relocation costs, lease-expense changes or any expected production interruption.

The programme covers businesses that reported year-on-year growth in Q2 FY27. Dental laboratory business grew 22.7%, comprising 32% growth in international laboratory business and 15% growth in domestic laboratory business. Aligner solutions rose 23.5%, with Bizdent up 27.7% and Vedia up 19.1%.

The facility plan also aligns with Laxmi Dental’s digital workflow strategy. Domestic laboratory digital penetration reached about 78% in Q2 FY27, and management reiterated a medium-term target of above 90%. Management said deployed scanners deepen dentist relationships and create recurring laboratory and aligner opportunities, while the facility would support manufacturing for that model.

How does the allocation fit Laxmi Dental’s recent results?

Laxmi Dental reported higher revenue and margins in Q2 FY27. Gross profit increased 23.5% year on year to Rs 61.2 crore, while gross margin rose to 76.9% from 68.5% in Q2 FY26, primarily because of favourable product mix, according to management. EBITDA margin expanded by about 390 basis points to 19.2% from 15.3%.

For H1 FY27, revenue from operations increased to Rs 154.2 crore from Rs 137.9 crore in H1 FY26. EBITDA rose 29.2% to Rs 29.6 crore and its margin increased to 19.2% from 16.6%, while profit after tax increased 20.7% to Rs 20.4 crore and its margin reached 13.2% from 12.2%.

Segment performance was not uniform during the quarter. Scanner sales contribution fell to Rs 3.5 crore in Q2 FY27 from Rs 8.9 crore a year earlier, even as laboratory and aligner businesses expanded. Management said it is evaluating the scanner roadmap and plans a subscription model intended to lower dentists’ upfront adoption cost and generate incremental business.

Laxmi Dental also said it had received a tariff refund of about Rs 5.5 crore, excluding interest, which will be reflected in Q3 FY27 results. The refund is separate from the Rs 48.1 crore IPO-proceeds allocation, and management did not state how it would be used.

Conclusion

Laxmi Dental has redirected Rs 48.1 crore of unused IPO funds into a defined owned-infrastructure programme, allocating above Rs 27 crore to land and construction and above Rs 21 crore to equipment. The plan coincides with Q2 FY27 growth in laboratory and aligner businesses and management’s intention to replace dispersed leased operations with an integrated manufacturing facility.

The next disclosed milestone is completion of the gradual plant transition by the end of FY28, with spending scheduled across FY27 and FY28. Matters still unresolved on the November 4, 2026 call include the facility location, capacity addition, construction progress, transition costs and the operational impact during the move.