Bad start to primary mkt: Goodwill Hospital withdraws IPO

It is a gloomy start to the year for the primary market. Depressed market conditions have already claimed their first victim with Goodwill Hospital and Research Centre withdrawing its initial public offer.

It was the first company that had tried to fight the gloom in the capital market since October 5, 2011. This highlights the nervousness among investors and lack of enthusiasm about the IPO market. Moreover, Investors have stopped participating in the secondary market due to slowdown fears and endless eurozone concerns.

Manish Bhatt of Prabhudas Lilladher says "Investors, after getting hit badly in the current market conditions, are not ready to invest not only at price-to-earnings of 9 but also of 20-25 PEs. It means they are completely ignoring the market for the time being."

The company has decided to withdraw in the morning of last day of IPO itself. The initial public offering opened for subscription during December 30, 2011 to January 09, 2012 - i.e. opened for 7 days.

There was participation only from some retail and non institutional investors while qualified institutional investors did not participate.

Goodwill Hospital was planned to raise Rs 62-crore through the issue, with a price band of Rs 175-185 a share. It was also offering one detachable warrant per equity share.

Company is engaged in running a multi specialty hospital at Noida called Ojjus Medicare, focusing on core areas such as neurology and neuro surgery, cardiology and cardiac surgery with emphasis on joint replacements and sports injuries. It also provides other services like paediatrics, diagnostic, critical care medicine, oncology, dermatology etc.

Company was intended to use issue proceeds for setting up of diagnostic centre at Faridabad (with an outlay of Rs 16.22 crore), establishment of six polyclinics (with cost of Rs 33.97 crore) and repayment of loans (of Rs 10 crore).

The book running lead manager to the issue was  SPA Merchant Bankers Ltd. Beetal Financial & Computer Services Pvt Ltd was the registrar.