Medi Assist Healthcare Services IPO day 2: GMP steady, check review, other key details. Should you subscribe?

  • Medi Assist Healthcare Services IPO, worth 1,171.58 crore, consists of offer-for-sale (OFS) by investors and promoters, who plan to sell 2.8 crore shares of the company. Medi Assist Healthcare Services IPO received 54% subscription on the first day, with two days remaining for subscription.

Dhanya Nagasundaram
Published16 Jan 2024, 10:14 AM IST
The Medi Assist IPO date of subscription is scheduled for Monday, January 15, and will close on Wednesday, January 17.
The Medi Assist IPO date of subscription is scheduled for Monday, January 15, and will close on Wednesday, January 17.(Photo: Courtesy company website)

Medi Assist Healthcare Services IPO opened for subscription on Monday, January 15. On the first day Medi Assist Healthcare Services IPO got off to a slow start and was booked 54%. There's still hope for a successful subscription outcome with two days remaining in the Medi Assist IPO.

Medi Assist IPO raised 351.47 crore on Friday, January 12, allotting 84,08,449 equity shares to 35 anchor investors.

Also Read: Medi Assist Healthcare Services IPO: Issue subscribed 54% on day 1; GMP sharply drops

Medi Assist Healthcare Services Limited offers insurance companies third-party administration services through its wholly owned subsidiaries, Medvantage TPA, Raksha TPA, and Medi Assist TPA. An organisation that handles health insurance claims on behalf of insurance companies and offers services like network management, policy administration, and customer service is known as a third party administrator.

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Medi Assist IPO key details.

As of September 30, 2023, the company has established a pan-India healthcare provider network that includes 18,754 hospitals spread across 1,069 cities and towns, 31 states (including union territories), and 141 countries worldwide.

The company, in its red herring prospectus (RHP), stated that there are no listed companies in India that engage in a business similar to that of them and their subsidiaries.

Also Read: Medi Assist Healthcare Services IPO: Price band fixed at 397-418 per share; check GMP, issue details, more

Medi Assist Healthcare Services IPO details

Medi Assist IPO, which is worth 1,171.58 crore, consists of offer-for-sale (OFS) by investors and promoters, among other current shareholders, who plans to sell 2.8 crore shares of the company. Therefore, the selling shareholders will receive the entire issue proceeds, less the IPO expenses.

Dr. Vikram Jit Singh Chhatwal, Bessemer India Capital Holding II Ltd., and Medimatter Health Management Private Limited are the company's promoters.

Also Read: Medi Assist IPO opens today. GMP, subscription status, review, other details. Buy or not?

Investor Investcorp Private Equity Fund I and promoter Bessemer India Capital Holdings II decreased their ownership of Medi Assist Healthcare Services prior to the anchor book and IPO opening dates. On January 10, shares of the company valued at 536 crore were sold, according to a notice sent to investors on Financial Express (FE) on January 12.

The book running lead managers of the Medi Assist Healthcare IPO are Axis Bank Limited, IIFL Securities Limited, Nuvama Wealth Management Limited, and SBI Capital Markets Limited. The registrar of the offering is Link Intime India Private Ltd.

Also Read: Medi Assist Healthcare IPO: Investcorp, Bessemer sell shares worth 536 crore ahead of IPO opening

Medi Assist Healthcare Services IPO GMP today

Medi Assist IPO GMP today or or grey market premium is +33. This indicates Medi Assist Healthcare Services share price were trading at a premium of 33 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Medi Assist Healthcare Services share price was indicated at 451 apiece, which is 7.89% higher than the IPO price of 418.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Also Read: Medi Asssist Healthcare mobilises 351 crore from anchor investors ahead of IPO

Medi Assist Healthcare Services IPO Review

Canara Bank Securities Ltd 

The brokerage states that the company's reach improves and it becomes a unique player in the third-party administration market of the insurance industry as awareness grows and more health care contracts are signed. The top line of the business grew at a 25% CAGR between FY21 and FY23. The PAT margin for FY 22 was 16.31%, and for FY 23 it was 14.67%. Returned on equity and assets for FY 23 are 10.49% and 19.30%, respectively.

“Based on the upper price band, the company’s P/E is valued at a multiple of 38x for the FY23. We recommend to subscribe for listing gains and long term,” the brokerage said. 

BP Wealth 

The brokerage holds the opinion that the company's dominant position in the Indian market as a third-party administrator strengthens its value proposition, increases profitability, and allows it to take advantage of the opportunities presented by the health insurance sector. These benefits include increased economies of scale, the capacity to invest in state-of-the-art technology, and superior negotiating leverage with healthcare provider networks. Apart from creating self-sustaining growth prospects, the organisation has exhibited a track record of amalgamating acquisitions into its operations and strengthening its standing in the health insurance sector.

“Medi Assist intends to pursue acquisition opportunities to expand existing service offerings, increase market share in existing markets, or expand to new geographies. Medi Assist also wants to pursue opportunities for carve-outs and alliances with insurance companies and focus on partnerships with employers and distributors. The issue is valued at a P/E of 38.2x on the upper price band based on FY23 earnings, which is fairly valued. We, therefore, recommend an SUBSCRIBE rating for the issue,” the brokerage said. 

Also Read: Medi Assist IPO opens next week. GMP, date, price, other details you should know

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.

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