Yatharth Hospital IPO closes today: GMP, subscription status, should you apply or not?

Yatharth Hospital IPO raised ₹205.96 crores from 18 anchor investors at the upper price band of ₹300 per equity share on Tuesday, July 25.

SBI Life Insurance Company, Goldman Sachs (Singapore), Kotak Mahindra Life Insurance Company, ICICI Prudential Mutual FundMax Life Insurance Company, HDFC MF, and BNP Paribas Arbitrage are a few prominent anchor investors.

Yatharth Hospital IPO consists of a fresh issuance of shares for ₹490 crore and an offer by the promoters Vimla, Prem Narayan, and Neena Tyagi to sell 65.51 lakh equity shares.

Yatharth Hospital intends to use the net proceeds to pay off or advance debt, Fund capital expenditure expenses for the company’s two hospitals, Noida Hospital and Greater Noida Hospital, as well as for the hospitals run by the company’s subsidiaries AKS and Ramraja. Additionally, fund inorganic growth initiatives through acquisitions and general corporate purposes.

Also Read: Yatharth Hospital IPO opens today: GMP, issue details, subscription status, 10 key things to know

Yatharth Hospital IPO has reserved not more than 50% of the shares in the public issue for Qualified Institutional Buyers (QIB), not less than 15% for Non Institutional Investors (NII), and not less than 35% of the offer is reserved for Retail Investors.

The face value of equity shares is ₹10 each. The floor price is 28.5 times and the cap price is 30.0 times the face value of the equity shares. The company’s price to earnings ratio at the floor price is 28.25 and at cap price is 29.73. Bids can be made for a minimum of 50 equity shares and in multiples of 50 equity shares thereafter.

For the quarter ended March, Yatharth Hospital’s profit after taxes stood at ₹65.77 crore, while revenue for Q4FY23 was ₹523.10 crore.

Yatharth Hospital Subscription Status today: Yatharth Hospital IPO subscription on day 3 was over 36 times. Yatharth Hospital IPO subscription was overall positive on the final day with overwhelming response from Qualified Institutional Buyers (QIBs) and Non Institutional Investors(NIIS) followed by retail investors.

Also Read: Yatharth Hospital IPO: Issue subscribed 10 times on day 3 so far; NIIs sees huge demand

Yatharth Hospital IPO GMP today: According to topsharebrokers.com, Yatharth Hospital IPO grey market premium (GMP) today is ₹53. This indicates that Yatharth Hospital share price was at a premium of ₹53 in the grey market on Friday.

Also Read: Yatharth Hospital IPO: What GMP signals as subscription opens tomorrow

On Thursday, Yatharth Hospital share price closed at a premium of ₹53 in the grey market, in the early trade Yatharth Hospital shares was trading at premium of ₹50.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Yatharth Hospital share is ₹355 apiece, which is 18.33% higher than the IPO price of ₹300.

Yatharth Hospital IPO listing on the bourses is scheduled on Monday, 7 August.

Link Intime India Private Ltd is the registrar to the public offer. The three book running lead managers associated with the offer are Intensive Fiscal Services Private Ltd, Ambit Private Ltd, and IIFL Securities Ltd.A

Yatharth Hospital Subscription Status on day 2 was driven by non institutional investors(NIIS) and retail investors. Yatharth Hospital IPO was subscribed 3.03 times.

Yatharth Hospital IPO: Issue subscribed 1.08 times on day 1; check details

Yatharth Hospital IPO Should I Buy? – Here’s what brokerages say

Nirmal Bang

One of the biggest hospitals in the Noida region, according to the brokerage, is Yatharth Hospital. Over the course of FY21–23, the number of occupied beds and ARPOB increased by 13% and 12% CAGR and 51% CAGR, respectively. Over the aforementioned time frame, EBITDA increased at a CAGR of 41%. Private spending currently makes up the majority of healthcare spending in India.

The number of doctors and nurses per 10,000 people in the northern Indian states of Haryana and Uttar Pradesh is below average. This is anticipated to get better moving forward, benefiting the company’s expansion goals. Aiming to further expand into other geographies and strengthen their position in the local healthcare sector, Yatharth Hospital recently acquired Jhansi-Orchha.

“Company intends to focus on more advanced specialties; having high demand in respective markets and deliver a higher ARPOB. With high ROE and ROCE of 36% and 24.4% respectively, we believe Yatharth Hospital is being offered at a reasonable valuation of 20.9x FY23 EV/EBITDA as compared to its peers. With healthy financials along with growth potentials in Northern India, we recommend ‘Subscribe’ to the issue,” said the brokerage.

According to the brokerage’s analysis, hospitals must provide pricing that are 20% less expensive than those of their competitors in order to establish their reputation. They have aspirations to expand in close proximity to Delhi and sections of Uttar Pradesh. They have claimed strong financial performance across the board. In terms of CAGR over a two-year period, revenue and profit after tax have risen by 51% and 83%, respectively.

“This issue is available at P/EPS of 29.73x, which is lower as compared to peer competitors. This cannot be apple-to-apple comparison, as this hospital is mainly concentrated in Delhi and they are emerging as multi speciality hospital among renowned peers. They have recently introduced kidney transplantation, bone marrow transplantation and oncology department. These speciality services will add cost to the hospital in medium to long term, hence margins could see pressure. Majorly, their revenue contributes majorly 34% from government deals which can stretch the debtor days and margin as well. Hence, we recommend to subscribe the issue for Listing gains,” added the brokerage.

Sushil Finance

“The issue seems reasonably priced at the upper price band of ₹ 300, at P/E of 35 whereas the listed peers like Healthcare Global Enterprises which is trading at P/E 151x (Highest) and Narayana Hrudalaya is trading at P/E of 33x (Lowest) and industry average P/E is 66x. Company’s Debt to Equity ratio improved from 2.57 to 1.44 from FY21 to FY23, still higher than 1 which is a concern.

The company operates in highly competitive segment. Their high fixed costs may negatively affect their profitability. Additionally, unfavorable pricing on medical supplies or the inability to pass on cost increases to payers could further impact their profitability. Keeping in mind the pros & cons of the company, cash surplus investors can invest in the issue, ” said the brokerage in its report.

Yatharth Hospital IPO opens: GMP, subscription status, should you subscribe or not?

Updated: 28 Jul 2023, 09:54 AM IST