Yatharth Hospital IPO opens: GMP, subscription status, should you subscribe or not?
Yatharth Hospital IPO opens for subscription, with a price band of ₹285 to ₹300 per share. The IPO has raised ₹205.96 crores from anchor investors. The net proceeds will be used to pay off debt, fund capital expenditure, and for inorganic growth initiatives.
Yatharth Hospital and Trauma Care Services Ltd initial public offering (IPO) opens for subscription on Wednesday, 26 July, and close on Friday, 28 July. The company has fixed the price band at ₹285 to ₹300 per equity share for the proposed initial public offer.
Yatharth Hospital IPO raised ₹205.96 crores from 18 anchor investors at the upper price band of ₹300 per equity share on Tuesday, July 25.
SBI Life Insurance Company, Goldman Sachs (Singapore), Kotak Mahindra Life Insurance Company, ICICI Prudential Mutual Fund, Max Life Insurance Company, HDFC MF, and BNP Paribas Arbitrage are a few prominent anchor investors.
Yatharth Hospital IPO consists of a fresh issuance of shares for ₹490 crore and an offer by the promoters Vimla, Prem Narayan, and Neena Tyagi to sell 65.51 lakh equity shares.
Yatharth Hospital intends to use the net proceeds to pay off or advance debt, Fund capital expenditure expenses for the company's two hospitals, Noida Hospital and Greater Noida Hospital, as well as for the hospitals run by the company's subsidiaries AKS and Ramraja. Additionally, fund inorganic growth initiatives through acquisitions and general corporate purposes.
Yatharth Hospital 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 Investors (NII), and not less than 35% of the offer is reserved for Retail Investors.
The face value of equity shares is ₹10 each. The floor price is 28.5 times and the cap price is 30.0 times the face value of the equity shares. The company's price to earnings ratio at the floor price is 28.25 and at cap price is 29.73. Bids can be made for a minimum of 50 equity shares and in multiples of 50 equity shares thereafter.
According to topsharebrokers.com, Yatharth Hospital IPO grey market premium (GMP) today is similar to previous session of ₹50. This indicates that Yatharth Hospital shares were trading at a premium of ₹50 in the grey market on Thursday.
On Wednesday, Yatharth Hospital shares were trading at a premium of ₹50 in the grey market.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Yatharth Hospital share is ₹355 apiece, which is 18.33% higher than the IPO price of ₹300
On day 1, Yatharth Hospital subscription status signals that the issue has been subscribed 1.08 times. Yatharth Hospital IPO saw overall positive response from Non Institutional Investors(NIIS) and retail investors followed by Qualified Institutional Buyers (QIBs) on day 1.
Yatharth Hospital shares will be listed on the bourses on Monday, 7 August.
Link Intime India Private Ltd is the registrar to the public offer. The three book running lead managers associated with the offer are Intensive Fiscal Services Private Ltd, Ambit Private Ltd, and IIFL Securities Ltd.
Yatharth Hospital IPO buy or not - What do brokerages say?
Reliance Securities
According to the brokerage's research, the IPO is priced at 39.2x P/E, 20.9x EV/EBITDA, and 5.4x EV/Sales based on FY23 financials. Currently, private spending makes up the majority of healthcare spending in India. The number of physicians and nurses per 10,000 people is lower than normal in North Indian provinces like Haryana, Uttar Pradesh, and Uttarakhand.
Going forward, this is anticipated to get better, benefitting the company's expansion goals. Their most recent purchase of the Jhansi-Orchha hospital is intended to help them continue to expand into new areas and strengthen their position in the local healthcare industry.
They want to concentrate on developing capabilities for new, more sophisticated specialties that are highly sought-after in the relevant micro markets and produce a higher ARPOB.
"In view of strong financials, growth potentials in Northern India, debt free company post IPO proceeds, advanced and patient-friendly facilities we give a ‘Subscribe’ to the issue," said the brokerage.
Marwadi Financial Services
According to the brokerage, the company will list at a P/E of 39.16x with a market cap of ₹25,755 million, while its competitors Apollo Hospitals Enterprise, Fortis Healthcare, Narayana Hrudalaya, Max Healthcare Institute, Krishna Institute of Medical Sciences, Healthcare Global Enterprises, and Global Health are trading at P/Es of 92.0x, 48.2x, 35.2x, 53.5x, 46.9x, 253.0x, and 59.1x, respectively.
“We assign 'Subscribe' rating to this IPO as the company is one of the leading super-specialty hospitals in Delhi NCR; this institution boasts a diverse range of specialties and payer mix, demonstrating a track record of consistent and stable operating and financial performance, with sustained growth. Also it is available at a reasonable valuation compared to its peers,” the brokerage said in its report.
Geojit
“At the upper price band of ₹300, Yatharth Hospital IPO is available at a P/E of 39.2x (on FY23 EPS), which appears to be reasonably priced compared to its peers. Considering its consistent topline growth, stable margins, strategic acquisition, revival of medical tourism, and promising industry outlook, we assign a “Subscribe” rating on a medium to long term basis,” said the brokerage in its report.
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