Paras Healthcare Shares List at 4% Premium, Rally Nearly 7% in Early Trade; How Much Did Investors Make?

Shares of Paras Healthcare made a fair debut on the Indian bourses on Wednesday, October 28, listing at a 3.90% premium to the issue price and then adding to those gains in early trade. The stock opened at Rs. 720 on both the BSE and the NSE against the IPO price of Rs. 693.

By 10:15 AM, the Paras Healthcare Shares were trading at Rs. 739 on the NSE, up 2.64% from its listing price and 6.64% above the issue price. On the BSE, it quoted at Rs. 740.25, up 2.81% from the open and 6.82% above the IPO price.

For investors who got an allotment, a single lot of 21 shares cost Rs. 14,553. At the listing price of Rs. 720, that lot was worth Rs. 15,120, a gain of Rs. 567. At the NSE price of Rs. 739 in morning trade, the lot value rose to Rs. 15,519, taking the gain to Rs. 966 per lot.

Paras Healthcare Beats Grey Market Expectations

The listing came in ahead of grey market expectations. The grey market premium had cooled to around Rs. 13 just before listing, which pointed to a debut near Rs. 706, well below the actual opening price. Earlier in the week, the GMP had been far stronger. It stood at Rs. 40 on October 21, the opening day of the issue, before fading as bidding progressed.

Paras Healthcare IPO Details

Paras Healthcare IPO was worth Rs. 1,450 crore and it opened for subscription from October 21 to October 23 in a price band of Rs. 660 to Rs. 693 per share. It comprised a fresh issue of shares worth Rs.500 crore and an offer for sale of Rs. 950 crore by promoter Dharminder Kumar Nagar and investor Commelina.

The company had earlier filed for a larger Rs. 1,800 crore issue.

Ahead of the public issue, it raised Rs. 652.30 crore from 39 anchor investors at Rs. 693 per share.

Bidding started with a muted tone. The issue was subscribed just 0.15 times on day one and 0.36 times on day two, before demand picked up on the final day to 2.34 times by 5 PM, excluding the anchor portion.

Money raised from the fresh issue will be used to repay debt of up to Rs. 375 crore across the company and its subsidiary, with the rest going towards general corporate purposes.

Should Investors BUY/SELL/HOLD?

Choice Institutional Equities initiated coverage and gave a BUY rating. In its report, it mentioned, "We project Revenue/EBITDA/PAT to expand at a CAGR of 21.9%/29.4%/99.1% over FY26-29E. PARASHLT's growth outlook is underpinned by a higher mix of specialised, high-value care, expansion of its established regional franchise into underserved markets and operating leverage from improving occupancy and capacity utilisation. Accordingly, we initiate coverage on PARASHLT with a 'BUY' rating and a target price of INR 900, with around 30% upside, based on a DCF valuation with an implied EV/EBITDA of 14x on FY29E.

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