Nephrocare Health Services shares fall 4% after listing at 7% premium to IPO price

Nephrocare Health listing ceremony on NSE

The shares of Nephrocare Health Services made a tepid market debut on December 17, listing at Rs 490 apiece on NSE. This marks a premium of 6.52 percent over the IPO price of Rs 460 per share.

On BSE, the shares listed with 6.89 percent premium over the IPO price. The company debuted with a market capitalization of Rs 4,934 crore.

After listing, the shares of the company fell around 4 percent to close at Rs 471.60 apiece, over 2.5 percent higher than IPO price.

This comes after the Rs 871-crore initial public offering of Asia's largest dialysis service provider under the Nephroplus brand saw strong investor interest during its three days of public bidding, being subscribed 14 times its offer size between December 10 and December 12.

Listing premium vs grey market estimates:

Ahead of listing, the unlisted shares of the company were trading with 8.04 percent grey market premium (GMP) over the IPO price, according to data on Investorgain. According to IPO Watch, the unlisted shares of the company were trading with 8.69 percent GMP over the IPO price.

About Nephrocare Health Services IPO:

Nephrocare Health Services launched its IPO to raise Rs 871 crore through a combination of fresh issue of shares worth Rs 353.4 crore and an offer for sale (OFS) of 1.12 crore shares by existing shareholders including promoters Investcorp, Healthcare Parent, Edoras Investment Holdings, International Finance Corporation, and 360 ONE.

The price band for the IPO was set at Rs 438-460 per share.

What lies ahead?

"Rising incidence of chronic kidney disease, high patient stickiness, and expansion of dialysis centres support long-term growth, though investors remain watchful on margin sustainability and regulatory factors in healthcare services," said Shivani Nyati, Head of Wealth at Swastika Investmart.

At the upper price band, the IPO values the company at P/E of 60.2x with EV/EBITDA of 26x to its FY25 earnings and market cap of Rs 461.53 crore post issue of equity shares, said Anand Rathi.

Geojit Financial Services meanwhile said that the company aims to strengthen its presence by launching new clinics, partnering with hospitals for asset-light growth, and improving accessibility in underserved regions. It had advised investors to subscribe to the issue with a long-term horizon.

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