Yatharth Hospital IPO opens today: 10 things to know before you buy it

The company has fixed a price band of Rs 285-300 per share for its initial public offering.

Also Read | Yatharth Hospital raises Rs 206 crore via anchor book

3) IPO Size

The total fundraising would be Rs 676.7 crore at a lower price band and Rs 686.55 crore at an upper price band via public issue. The issue comprises a fresh issuance of shares worth Rs 490 crore and an offer for sale (OFS) of 65.51 lakh equity shares by promoters Vimla Tyagi, Prem Narayan Tyagi and Neena Tyagi.

The actual fresh issue size was Rs 610 crore, which was later reduced to Rs 490 crore as the company raised Rs 120 crore via private placement (pre-IPO placement) of 40 lakh shares at a price of Rs 300 per share on July 6, before filing the red herring prospectus with the Registrar of Companies.

4) Objectives Of Issue

Yatharth Hospital will utilise fresh issue proceeds for repaying debts, capital expenditure for hospitals, and funding inorganic growth initiatives, besides general corporate purposes.

5) Lot Size

Investors can bid for a minimum of 50 equity shares and in multiples of 50 shares thereafter. Retail investors can invest a minimum of Rs 15,000 for a lot (50 shares X Rs 300) and the maximum investment by them would be Rs 1.95 lakh (13 lots).

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6) Company Profile

Yatharth Hospital & Trauma Care Services Limited operates three super speciality hospitals located in Delhi NCR, i.e., at Noida, Greater Noida and Noida Extension, Uttar Pradesh. Further, it acquired a 305-bedded multi-speciality hospital in Orchha, Madhya Pradesh near Jhansi, Uttar Pradesh, which commenced commercial operations on April 10, 2022, and is one of the largest hospitals in Jhansi- Orchha-Gwalior region in terms of number of beds. With this acquisition, its total bed capacity has increased to 1,405 beds.

Its critical care program comprises 394 critical care beds, as of March 31 2023. Further, its Noida Extension hospital with 450 beds is one of the largest hospitals in the Noida Extension, Uttar Pradesh region. As of March 31, 2023, it engaged 609 doctors and offers healthcare services across several specialities and super specialities

7) Financials

Yatharth has demonstrated stable operating and financial performance and growth over the past three fiscals. Its EBITDA has grown at a CAGR of 41.29 percent from Rs 67.01 crore in fiscal 2021 to Rs 133.76 million in fiscal 2023. Its net profit increased from Rs 19.58 crore in fiscal 2021 to Rs 44.16 crore in fiscal 2022 which further increased to Rs 65.76 crore in fiscal 2023.

Its net worth has increased from Rs 72.45 crore as of March 31, 2021, to Rs 182.96 crore as of March 31, 2023. Yatharth recorded an operating margin of 25.71 percent in fiscal 2023. Its number of operational beds increased from 864 in Fiscal 2021 to 1,405 beds in Fiscal 2023 at a CAGR of 27.52 percent, and the occupancy rate of its beds increased from 41.63 percent in Fiscal 2021 to 49.97 percent in Fiscal 2022. In Fiscal 2023, its bed occupancy rate was 45.33 percent as the Jhansi-Orchha hospital commenced commercial operations

8) Promoters and Management

The promoters of the hospital are doctors themselves. Besides, its board is composed of individuals with diverse experience in the sectors of hospitality, medicine, finance, banking and economics, and general administration. The Executive Director, Yatharth Tyagi, brings international business exposure to strategic expansion plans. He holds a bachelor’s degree in business and management from Leeds Beckett University and holds a master of science degree in International Health Management from Imperial College London.

Dr Sanjeev Upadhyay is a doctor and is associated with United National Children’s Fund as Health & Nutrition Specialist, Mukesh Sharma is an ex-banker, and Ila Patnaik is a senior economist. Upadhyay, Sharma and Patnaik have recently joined its Board.

Chief Executive Officer is Amit Kumar Singh, who has 16 years of experience in and as a part of senior management in various healthcare institutions. Chief Financial Officer is Pankaj Prabhakar, who is a qualified chartered accountant and our company secretary and Compliance Officer is Ritesh Mishra, a qualified company secretary.

9) Risks and Concerns

According to brokerages, below are some of the key risk factors:

-Yatharth is highly dependent on doctors, nurses and other healthcare professionals and its business and financial performance will be impacted significantly if the company is unable to attract, retain or train such professionals.

- The Company depends on the strength of its brand and reputation. Failure to maintain and enhance those brands and reputations, and any negative publicity and allegations in the media against this, may materially and adversely affect the level of market recognition of, and trust in, the services, which could result in a material adverse impact on company’s business, financial condition, results of operations and prospects.

- If a company is unable to increase its hospital occupancy rates, it may not be able to generate adequate returns on its capital expenditures, which could materially adversely affect the operating efficiencies and also profitability.

10) Allotment and Listing Dates.

The basis of the allotment of IPO shares will be finalised by August 2 and the equity shares will be credited to the demat accounts of eligible investors by August 4. The refunds will be transferred to the bank accounts of unsuccessful investors by August 3.

The trading in equity shares of Yatharth Hospital will start on August 7, as per the IPO schedule.