Medanta Operator Global Health IPO: GMP, Subscription, Other Details; Should you Buy?

Medanta Operator Global Health’s IPO Day 2: The initial public offering of Global Health Ltd, which opened for subscription to the public on Thursday, was subscribed 26 per cent. The IPO of hospitals under the Medanta brand will close for subscription on Monday.

The Rs 2,206 crore IPO, with a combination of Offer for Sale and fresh issue, operates five hospitals in north and east India Plans to increase bed capacity by 40 per cent in 3-4 years. Medanta said that it has mobilised Rs 662 crore from anchor investors ahead of its initial public offering (IPO) that opened for public subscription on Thursday.

Global Health IPO: Subscription Status

As of 11:05 am on day 2 on Friday, the issue has been overall subscribed 0.35 times with retail investors’ category booked 0.17x, NIIs 0.52x and QIBs 0.54x, BSE data showed.

Global Health IPO: Price band

It has been fixed between Rs 319 and Rs 336 per equity share of face value Rs 2 each.

Global Health IPO: Offer Details

Founded by cardiologist Naresh Trehan, the company is planning to raise about Rs 2,119 crore- 2,206 crore through this issue. It includes a fresh issue of Rs 500 crore, comprising 1.49-1.57 crore shares and an offer for sale (OFS) of Rs 1,169 – Rs 1,706 crore, comprising 5.08 crore equity shares by promoters and shareholders.

The OFS by selling shareholders includes the sale of 5.07 crore shares by Anant Investments and 1 lakh equity shares by Sunil Sachdeva and Suman Sachdeva. The company will not get any proceeds from the OFS portion. Those proceeds will entirely go to the promoters.

Post the issue, the promoter shareholding will fall to 33 per cent from the current 35 per cent.

Of the total offer size, 75 per cent of the net offer will be reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and the remaining 10 per cent for retail investors.

Global Health IPO: Objective

Of the net proceeds from the fresh issue, Rs 375 crore will be invested in the company’s subsidiaries. They, in turn, will utilise the fund for prepayment/repayment of debt. Residual funds will be used for general corporate purposes.

Global Health IPO: Financials

During the financial year ending March 2020, the company generated revenues to the tune of Rs 1,480 crore. Revenues in FY21 came in at Rs 1,418 crore while the company reported revenue of Rs 2,166 crore during FY22. During the three-month period ending June 2022, its revenues stood at Rs 596 crore. During the same period last year, revenues were Rs 472 crore.

Revenues have grown at a CAGR of 20 per cent over FY20-22, led by an eight per cent CAGR in bed capacity. Occupancies improved to 60 per cent and average revenue per operating bed (ARPOB) grew by 4 per cent over the same period.

Global Health IPO GMP Today

As per market observers, Global Health shares are available at a premium (GMP) of Rs 15 in the grey market today.

The company’s shares are expected to list on leading stock exchanges BSE and NSE on Wednesday, November 16, 2022. Shares will be allotted to successful bidders on November 11, and the refund to unsuccessful bidders will be credited on November 14. Shares will be credited to the demat account of the successful bidders by November 15 and the stock will debut on the bourses on November 16.

Global Health IPO: Should You Invest?

“Global Health’s identity is Medanta brand and the reputation of Dr Trehan besides the flagship ‘’Medanta The Medicity’’ hospital, Gurugram. At the upper price band, it is valued at ~21x FY22 EV/EBITDA. We assign SUBSCRIBE rating on the back of improving financials, decent valuation and growing investors interest in the hospitals space,” said brokerage ICICI Securities in an IPO note.

Founded by Dr Naresh Trehan, a renowned cardiovascular and cardiothoracic surgeon, Global Health is a leading private multi-speciality tertiary care providers in the north and east regions of India.

It provides healthcare services in over 30 medical specialties and engage over 1,300 doctors spanning an area of 4.7 million square feet (sq ft). Core specialties include cardiology, cardiac science, neurosciences, oncology, digestive and hepatobiliary sciences, orthopaedics.

Kotal Mahindra Capital Company, Credit Suisse Securities (India), Jefferies India and JM Financial are the book-running lead managers to the IPO.

Disclaimer: The views and investment tips by experts in this report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

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