Yatharth Hospital & Trauma Care Services is likely to debut with a decent double-digit premium of at least 20 percent over the issue price of Rs 300 per share, owing to strong subscription figures. This is attributed to the hospital chain's position as a prominent super specialty provider in Delhi NCR, boasting diverse specialties, a strong payer mix, and consistent operational and financial growth.
The Rs 687-crore public issue had seen a healthy response from investors, subscribing 36.16 times during July 26-28. Qualified institutional investors were at the forefront in terms of support to the offer, buying 85.10 times the allotted quota, followed by high networth individuals and retail investors who had bid 37.22 times and 8.34 times the portions set aside for them, respectively.
"Following a strong subscription to the issue, Yatharth Hospital is likely to make a decent listing on the bourses on Monday," Prathamesh Masdekar, research analyst at StoxBox said.
He expects shares to list at around 20 percent premium to the issue price of Rs 300 per share on the back of focused presence in the NCR region with a diverse speciality and payer mix along with favourable sectoral tailwinds.
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The Noida-based multi-care hospital chain operates three super speciality hospitals located in Delhi NCR, and another 305-bedded multi-speciality hospital in Madhya Pradesh, taking the total bed capacity to 1,405 beds with 609 doctors at the end of FY23, which increased from 864 beds in FY21, growing at a CAGR of 27.5 percent.
Yatharth Hospital has registered stable operating and financial performance over the past fiscals. The profit for the year ended March FY23 grew by 49 percent to Rs 65.8 crore, with revenue rising 30 percent to Rs 520.3 crore and EBITDA increasing 21 percent to Rs 133.8 crore, but the margin contracted to 25.7 percent from 27.64 percent during the same period.
The company’s revenue per OPD patient was Rs 1,669.22, which increased to Rs 2,074.01 during the same period.
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Astha Jain, senior research analyst at Hem Securities is expecting Yatharth Hospital to list at a 20-23 percent premium to issue price, while Prashanth Tapse, analyst and senior VP of research at Mehta Equities is also anticipating a healthy 20-25 percent listing gains on the back of reasonable ask valuations along with healthy margins when compared to peers. These analyst expectations are also motivated by Yatharth's long-term expansion plans aiming to tap the medical tourism segment.
In addition to the above factors, Yatharth will also become a debt-free company after its IPO which would also expand its bottomline post IPO, Tapse believes.
The public issue comprised a fresh issue of Rs 490 crore and an offer for sale of Rs 196.55 crore by promoters.
The company will be utilising fresh issue proceeds for repaying debts, capital expenditure for hospitals, and inorganic growth initiatives.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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