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Shalby IPO To Open Tomorrow: Should You Subscribe?
Healthy valuation compared to its listed peers in the market, the company's IPO has been given a Subscribe outlook by analysts with a long term perspective and minimum exposure.
The company into the hospital space with its IPO issue of Rs. 504 crore includes an OFS of Rs. 24.8 cr as well as issuance of fresh share for Rs. 480 cr. The price band for the issue is decided to be in the range of Rs. 245-Rs.248. Investors can bid for a minimum of 60 shares in the issue that will remain open from December 5- December 7. So, here is a take on the IPO in detail:
Company Profile: The company into the hospital space has its headquarters in Ahmedabad. The industry has not been promising but the multi-specialty hospital is fast making its presence more prominent in Central and Western India apart from the overseas outreach through its facilities in the Middle East and Africa.
The company's forte includes two of the technology that it pioneers mainly in the area of orthopaedic surgery and knee replacement procedures.
Financials: Currently, as the company is expanding its footprint its margins are likely to be impacted but as the breakeven is reached, profitability of the company is set to rise. More so with more and more occupancy, earnings of the group are likely to increase going forwardRevenue wise the company has witnessed an increase in its levels on a consistent basis. The profit after tax for the company for the FY remained at 19.1%. The return on equity is also favourable with double digit growth of 22% in the last fiscal
Valuations: With a P/E of 34.6 in comparison to other listed peers in the segment such as Fortis, Apollo Hospitals and Narayana Hrudayalaya, the company offers a reasonable valuation for its investors. Also as against the counterparts, the company has managed to offer a higher return.
Conclusion: Seeing the growth prospects of the company and in light of its healthy valuation compared to its listed peers in the market, the company's IPO has been given a Subscribe outlook by analysts with a long term perspective and minimum exposure.
More so, the company's valuations are likely to be continued if it maintains to generate the margins as before and with asset-light model which limits its operating costs, the profit is anticipated towards a higher side. So even after the government's intervention via capping of costs for several implants has slowed down the pace of growth for the sector, there is scope enough for investors to earn reasonably from the issue provided they can bear with some risks.
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