Yatharth Hospital IPO Opens Today For Subscriptions, What GMP hints, And Should You Invest?

Yatharth Hospital IPO: The Delhi-based multi-care hospital chain is set to launch its initial public offering (IPO) on Wednesday for subscriptions across investor categories. The latest grey market premium suggests a premium listing for the IPO on market exchanges BSE and NSE. Before the day of the IPO opening, the company has already raised Rs 205.69 crore from 18 anchor investors.

The IPO is a combination of fresh issues worth Rs 490 crore and an offer for sale up 6,551,690 equity shares. Selling shareholders belonging to promoters group, Vimla Tyagi, Prem Narayan Tyagi and Neena Tyagi will participate in the OFS.

Overall, under the IPO, a total of 1,65,17,823 equity shares are proposed for subscriptions. That being said, the company is looking to raise Rs 686.55 crore from the IPO taking into consideration the upper price band.

The bidding in the IPO will begin from 10 am to 5 pm starting from July 26. Subscriptions will be allowed till July 28.

On Wednesday, the grey market premium (GMP) of Yatharth Hospital in the early hours stood at Rs 55 per share. As per TopShareBrokers.com, the GMP suggests an 18.33% premium listing against the issue's upper price band (Rs 300 + Rs 55).

However, this is lower compared to the GMP of Rs 75 on Tuesday, which suggested a 25% premium listing from the IPO price band.

The public offer's price band is fixed at Rs 285 to Rs 300 per equity share. The minimum quantity that can be bid is 50 equity shares, which is also the market lot size. The maximum bid quantity for qualified institutional buyers (QIBs) is a little over 1,65,17,800 shares. While maximum bid quantity for non-institutional investors (NIIs) is 1,18,72,300 equity shares.

From the total IPO size, 50% of the portion will be reserved for qualified institutional buyers (QIBs), while 15% will be kept for non-institutional investors (NIIs) and the rest of 35% will be allocated to retail individual investors (RIIs).

Giving its view on the IPO, analysts at Geojit in their note said, "At the upper price band of Rs 300, Yatharth 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."

However, the brokerage pointed out key risks for the company are --- increasing competition, from regional competitors; and retention of doctors and other healthcare professionals.

Yatharth's peers on exchanges would be Apollo Hospital, Fortis Healthcare, Narayana Hrudayalaya and Max Healthcare.

Ahead of the IPO, on Tuesday, the company finalized the allocation of 6,865,506 equity shares to anchor investors at the upper price band of Rs 300 per share. The anchor book included both domestic and foreign investors such as ICICI Prudential Pharma Healthcare And Diagnostics, HDFC Mutual Fund, SBI Life Insurance Company, Kotak Mahindra Life Insurance, Max Life Insurance, Goldman Sachs, Jupiter India Fund, Carnelian Capital Compounder Fund-1, HSBC Global Investment Funds, and Aditya Birla Sun Life Trustee among others.

Companies like Intensive Fiscal Services, Ambit Private Limited, and IIFL Securities are the book-running lead managers for the IPO. While Link Intime India is the registrar for the issue.

Yatharth plans to utilise the proceeds from fresh issues for a host of growth initiatives. These are --- repayment of certain borrowings; and repayment of borrowings availed by its subsidiaries such as AKS Medical & Research Centre and Ramraja Multispeciality Hospital & Trauma Centre. Further, a part of the proceeds will be used for funding CAPEX for its two hospitals namely Noida Hospital and Greater Noida Hospital. Also, it will fund CAPEX for subsidiaries AKS and Ramraja, for respective hospitals operated by them. Also, funding will be made for inorganic growth initiatives through acquisitions and other strategic initiatives; and general corporate purposes.

Notably, the proceeds from the offer for sale will not be used by the company and will transferred to the selling shareholders.

Yatharth's equity shares proposed in the IPO will be listed on BSE and NSE.

After the IPO, the basis of allotment of equity shares is expected to take place on August 2, while the initiation of refunds will be carried out on August 3rd, as per Chittorgarh's report. Investors can expect the shares to be credited to their Demat accounts by August 4. Lastly, the market debut on exchanges is expected to take place on August 7.

Disclaimer:

The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns. in advises users to consult with certified experts before making any investment decision.