Medanta hospital operator, Global Health recorded a full subscription in its initial public offering (IPO) which ended on Monday. On the last day, the IPO received 9.58 times oversubscription with massive appetite seen in qualified institutional buyers (QIBs). Global Health is the country's largest IPO in the hospital sector.
As per BSE data, Global Health cumulatively received cumulative bids of nearly 44.80 crore equity shares against its offered size of over 4.67 crore equity shares -- registering a subscription of 9.58 times.
Further, the reserved portion for qualified institutional investors subscribed by 28.64 times, while the portion kept for non-institutional investors witnessed a subscription of 4.02 times.
However, demand from retail individual investors (RIIs) was low as the reserved portion for this category did not fully subscribe. RIIs subscribed to the IPO by 88% against the allocated shares to them.
Of the total issue size, 50% of the IPO will be allocated to qualified institutional buyers (QIB), while 15% of the size will be kept for non-institutional investors and the remaining 35% for retail individuals.
The IPO opened on 3 November and closed on 7 November. Its price band was fixed at ₹319 apiece to ₹336 apiece.
The IPO comprised a fresh issue worth ₹500 crore and an offer for sale (OFS) of nearly 5.08 crore equity shares by promoters. Among the selling shareholders are -- Anant Investments and Sunil Sachdeva. The company planned to raise about ₹2,205 crore from the issue.
Kotak Mahindra Capital, Credit Suisse Securities (India), Jefferies India, and JM Financial were lead managers of the IPO.
Global Health is one of the largest private multi-specialty tertiary care providers operating in the North and East regions of India in terms of bed capacity and operating revenues as of March 31, 2022. The company's key specialties are in cardiology and cardiac science, neurosciences, oncology, digestive and hepatobiliary sciences, orthopaedics, liver transplant, and kidney and urology, according to Crisil Report.
Notably, Global Health is not the only hospital public offering this year. Earlier, in April 2022, Rainbow Hospitals launched an IPO of ₹1,581 crore. However, Global Health is the largest IPO in the hospital sector in terms of size since April 2007.
After Global Health, the last IPO which was over ₹2,000 crore was of KIMS who launched a public offer worth ₹2,143 crore in June 2021.
Meanwhile, there were no hospital IPOs in 2019 and 2020. In February 2018, Aster DM launched its IPO to the tune of ₹980 crore. In December 2017, Shalby Hospitals launched its IPO for ₹505 crore. Further, in March 2016, Healthcare Global IPO entered to raise ₹650 crore, following Narayana Health (erstwhile Narayana Hrudalaya) IPO worth ₹613 crore in December 2015.
Between 2008 to 2014, there were no IPOs in the hospital sector. However, in April 2007, Fortis Healthcare which is an Indian multinational chain of private hospitals - launched its IPO for ₹497 crore.
Just like the other mentioned hospital IPOs, Global Health's equity shares will be listed on the stock exchanges BSE and NSE.
On Monday, Global Health is available at a premium of ₹16 in the grey market. This means, that the probable listing of Global Health can be around ₹352 ( upper price band of ₹336 + ₹16). It needs to be noted that GMP prices change every day and hence the listing expectations will vary accordingly.
According to Anand Rathi's IPO note, Global Health has good operating metrics and a financial profile with topline and margin increasing over years. When compared to its listed peers, Medanta is fairly valued.
In its note, Ventura Securities said that Global Health has a network of five hospitals in Gurugram, Indore, Ranchi, Lucknow, and Patna; it is building a new hospital in Noida, which is expected to commence operations in FY25. They provide healthcare services in over 30 medical specialties and engage over 1,300 doctors led by experienced department heads.
Ventura's note added, "we are expecting Global Health Ltd’s revenue/Ebitda/ PAT to grow at a CAGR of 19.5%/ 23.7%/ 37% to ₹3700 crore/ ₹859 crore/ ₹504 crore respectively over FY22- 25E, while Ebitda and PAT margins are also expected to improve by 220bps to 23.2% and 450bps to 13.6% respectively."