The initial public offering (IPO) of Yatharth Hospital and Trauma Care Services opened for subscription on Wednesday and will close on 28 July. The company raised nearly Rs 206 crore from 18 anchor investors ahead of the IPO opening.
The IPO has received a positive response from analysts, with most recommending a "subscribe" considering the strong financials and growth potential in Northern India.
Yatharth Hospital & Trauma Care Services is a private hospital chain that provides healthcare services and is based in Noida. It has four operational hospitals, with a total capacity of 1,405 beds as of March 2023. The company has engaged the services of more than 600 doctors.
The Yatharth Hospital IPO comprises a fresh issue of up to Rs 490 crore and an offer for sale (OFS) of Rs 65.51 lakh shares. Under the OFS, Vimla Tyagi will sell 37.43 lakh shares, Prem Narayan Tyagi will offload 20.21 lakh shares, and Neena Tyagi will sell 7.87 lakh shares.
The company has fixed the price band between Rs 285-300 per share. Investors can bid for 50 shares in one lot and in multiples thereafter.
It has reserved 50 per cent of the offer for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors (NIIs), and the remaining 35 per cent for retail investors.
The hospital chain is looking to raise Rs 686 crore at the upper price band.
The Yatharth Hospital IPO was commanding a premium of Rs 60 in the unlisted market, according to ipowatch.in.
Subscription Status
As of 1:36 PM on Wednesday, Yatharth Hospital IPO was subscribed 0.54 times. The public issue subscribed 0.75 times in the retail category, 0.00 times in QIB, and 0.75 times in the NII category.
Geojit Financial Services assigned a ‘Subscribe for long term’ rating to the stock. At the upper price band, Yatharth is available at a P/E of 39.2 times, based 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 Geojit Financial.
According to Marwadi Financial Services Ltd, the institution boasts a diverse range of specialities and payer mix, demonstrating a track record of consistent and table operating and financial performance with sustained growth. In addition, it is available at a reasonable valuation compared to its peers.
Hensex Securties also have a subscribe rating on the IPO. "The company operates in a heavily regulated industry and is required to obtain a number of approvals and licenses from governmental and regulatory authorities. It operates in an industry with high fixed costs, failure to achieve favourable pricing on medical consumables, pharmacy items, drugs, and surgical instruments," the firm cited as the key risks for the issue.
Yatharth Hospital proposes to utilise the proceeds from the fresh issue for fund repayments, capital expenditure for hospitals, and financing inorganic growth initiatives through acquisitions, strategic initiatives and general corpotate purposes.
The final allotment of shares is expected to take place on 2 August. The refunds for non-allottees are likely to start on 3 August. Shares of Yatharth IPO will list on the stock exchanges on 7 August.
