Jupiter Life Line Hospitals IPO has received decent response from investors on the first day of bidding. The offer has been subscribed 87 percent with bids for 74.07 lakh shares against issue size of 84.97 lakh shares.
Retail investors and high networth individuals have bought shares 1.11 times and 1.43 times the allotted quota, which was 35 percent and 15 percent to the total issue size, respectively. Qualified institutional investors have bid for 1 percent shares of the reserved portion which is 50 percent in the IPO.
The Mumbai-based multi-specialty, tertiary and quaternary healthcare provider aims to mop up Rs 869.08 crore via maiden public issue, at the upper price band.
The offer comprises a fresh issuance of shares worth Rs 542 crore and an offer-for-sale of shares worth Rs 327.08 crore by 10 selling shareholders including promoter group.
Also read: Jupiter Life Line Hospitals IPO opens | 10 key things to know before you subscribe
The price band for the offer, which closes on September 8, has been fixed at Rs 695-735 per share.
The healthcare service provider already raised Rs 260.72 crore from several anchor investors on September 5, including marquee investors like Goldman Sachs, Fidelity Funds, Abu Dhabi Investment Authority, HSBC Global, Government of Singapore, SBI Mutual Fund, Nomura Funds, and HDFC Mutual Fund.
The fresh issue proceeds will be utilised mainly for repaying debts amounting to Rs 510.4 crore and the remaining for general corporate purposes. It has total borrowings of Rs 476.4 crore as of March FY23.
The company operates three hospitals under the Jupiter brand, with a total bed capacity of 1,194 hospital beds across three hospitals as of March 2023. It is also in the process of developing a multi-specialty hospital in Dombivli, Maharashtra, with over 500 beds capacity.
Also read: Oman India Joint Investment Fund-backed Stanley Lifestyles files IPO papers
Analysts have recommended the public isssue with a long term view, citing healthy financial performance and decent return ratios & margins.
Overall, Swastika Investmart believes that Jupiter Life Line Hospitals is a well positioned company with good growth prospects. The P/E valuation of the IPO is around 52.68x, which is in line with the industry’s average.
After considering all the factors, the brokerage recommend to subscribe the IPO for the long term.
Jupiter Life Line Hospitals is a well-established multi-specialty healthcare provider in the western region of India with a strong brand reputation and clinical expertise. The company has a track record of maintaining and recruiting high-quality medical professionals, and it is planning to expand its operations in the
future. Its recent financial performance has been satisfactory, the brokerage said.
Profit in the year FY23 rose by 42.6 percent on-year to Rs 72.9 crore and revenue from operations grew by 21.7 percent to Rs 892.5 crore during the same period, while the EBITDA margin expanded by 163 bps on-year to 22.55 percent in the fiscal year 2023 and the net profit margin improved further to 8.07 percent from 6.94 percent during the same period.
With a market capitalisation of Rs 4,819 crore at the upper price band, its return on equity and return on capital employed, too, remained strong at over 20 percent in FY23
SBI Securities feels the IPO looks fairly valued across various valuation parameters when compared with its peers. "With decent return ratios and margins, the risk reward ratio for long term investors looks favourable. The investors can subscribe to the IPO for a long term investment perspective," the brokerage said.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
