Medi Assist Healthcare Services IPO opened for subscription on Monday, January 15, and will close today (Wednesday, January 17). The Medi Assist Healthcare Services IPO price band has been fixed in the range of ₹397 to ₹418 per equity share of the face value of ₹5. On the first day, Medi Assist Healthcare Services IPO got off to a slow start and was booked at 54%, but on the second day, within a few minutes of opening, the retail portion got fully booked, and towards the end of the day 2, the issue was 1.20 times.
On day 2, Medi Assist Healthcare Services IPO's retail investors portion was subscribed 1.70 times, Non Institutional Investors (NII) portion was subscribed 1.61 times, and Qualified Institutional Buyers (QIB) portion is booked 1%.
Medi Assist IPO raised ₹351.47 crore on Friday, January 12, allotting 84,08,449 equity shares to 35 anchor investors.
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Medi Assist IPO has reserved not more than 50% of the shares in the public issue for qualified institutional buyers (QIB), not less than 15% for non-institutional Institutional Investors (NII), and not less than 35% of the offer is reserved for retail investors.
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.
Also Read: Medi Assist IPO opens today. GMP, subscription status, review, other details. Buy or not?
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.
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.
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.
Medi Assist IPO GMP today or or grey market premium is +14. This indicates Medi Assist Healthcare Services share price were trading at a premium of ₹14 in the grey market, according to investorgain.com. The GMP has sharply fallen from yesterday's and morning +44 premium.
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 ₹432 apiece, which is 3.35% higher than the IPO price of ₹418.
Based on last 15 sessions grey market activities, the current GMP ( ₹14) is showing signals towards the lower side. The lowest GMP is ₹0, while the highest GMP is ₹81, as per investorgain.com analysts.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
The brokerage claims that no comparable peers have a business strategy that is similar to Medi Assist IPO. Because of the nature of the activities, the peers are only taken into account when benchmarking the requested valuation. In comparison to its TTM EPS of Rs. 12, the Medi Assist IPO is requesting a P/E multiple of 34.8x at a higher price range, which is less than the peer average of 42.6x. The issue is therefore attractively priced.
The brokerage in its report compared Medi Assist IPO with Computer Age Management Services Ltd, and KFin Technologies Ltd.
"Medi Assist Healthcare Services is catering to the fast growing health insurance sector. Thus, considering its dominant share in the TPA market, consistent financial performance, healthy cash flow generation and dividend payout, we assign a “SUBSCRIBE” rating for the issue.
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.
“The company is a unique player in third party administration business in the insurance segment and its scope is widening with more health care business is being inked with rising awareness. The company will be back on track once all recent acquisition settlements are in place. Post listing, this company will attract fancy as the first mover in the segment. Investors may park funds for the medium to long term rewards in this sunrise industry,” said Dilip Davda, the contributing editor at Chittorgarh.
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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