Global Health IPO | Medanta IPO has set a price band of Rs 319-336 a share for its Rs 2,206 crore initial public offering. Global Health Limited operates and manages hospitals under the Medanta brand. Global Health is backed by private equity investors like Carlyle Group and Temasek and operates a network of five hospitals under the Medanta brand in Gurugram, Indore, Ranchi, Lucknow and Patna.
| Bidding date | 3rd Nov – 7th Nov’2022 |
| Issue Fresh | Fresh Issue of Equity shares up to 500 cr |
| Issue OFS | offer for sale of 50,761,000 Equity Shares. |
| Issue Size (Rs. Cr. ) | ₹ 2,119 -2,206 Cr |
| Issue Size (Shares) | 66,434,981-65,641,952 Shares |
| Face Value in Rs. | 2 |
| Bid Lot shares | 44 and multiples |
| Price Band | ₹ 319 – 336 |
| Issue Structure : | |
| QIB | 50% |
| NIB | 15% |
| Retail | 35%, 229 L shares, 771 Cr. |
| Appl. for 1x Retail | 5.2 lac |
About Global Health Ltd (“Medanta”)
- Founded by Dr. Naresh Trehan
- Global Health Ltd (“Medanta”) was incorporated on August 13, 2004.
- Medanta is one of the largest private multi-speciality tertiary care providers operating in the North and East regions of India, with key specialties of cardiology and cardiac science, neurosciences, oncology, digestive and hepatobiliary sciences, orthopaedics, liver transplant, and kidney and urology.
- Under the “Medanta” brand, they have a network of 5 hospitals currently in operation (Gurugram, Indore, Ranchi, Lucknow, and Patna), and 1 hospital (Noida), which is under construction.
- As of June 30, 2022, they provide healthcare services in over 30 medical specialties and engages over 1,300 doctors led by highly experienced department heads and, spanning an area of 4.7 million sq. ft. (“msf”), their operational hospitals have 2,467 installed beds.
Anchor Book: Global Health IPO | Medanta IPO
Global Health made anchor allocation of Rs.661.67 crore to 52 major anchor investors showing a robust demand. .Out of total anchor allocation, Global Health Ltd (Medanta) allotted 76,95,465 shares to 28 domestic mutual fund schemes across 13 AMCs. which represents 39.08% of the overall anchor allocation.
| Investor | % Anchor book |
| HDFC Small Cap Fund | 4.09% |
| Nomura India Stock Mother Fund | 4.08% |
| Stichting APG Emerging Fund | 4.08% |
| Ontario Teachers Pensions Fund | 4.08% |
| Polar Healthcare Opportunities Fund | 4.08% |
| Ashoka India Opportunities Fund | 4.08% |
| Norwegian Pension Fund | 4.08% |
| Government of Singapore | 3.48% |
| IIFL Select Series II | 2.80% |
| Prudential Assurance Company | 2.80% |
Global Health IPO | Medanta IPO : Financials
| Particulars / (₹ Cr) | 2022(03) | 2021(03) | 2022(12) | 2021(12) | 2020(12) |
| Revenue from Operations | 617.21 | 485.49 | 2,166.59 | 1,446.74 | 1,500.42 |
| Revenue Growth (%) | 27.13% | – | 49.76% | -3.58% | |
| EBITDA | 141.65 | 105.77 | 489.76 | 222.85 | 230.45 |
| Profit before Tax | 87.03 | 58.19 | 280.56 | 32.46 | 63.87 |
| Net Profit | 58.71 | 41.76 | 196.2 | 28.81 | 36.33 |
| Net Profit Margin (%) | 9.51% | 8.60% | 9.06% | 1.99% | 2.42% |
| Equity Share Capital | 50.65 | 49.8 | 50.65 | 49.59 | 49.35 |
| EPS – Diluted (₹) | 2.31^ | 1.67^ | 7.77 | 1.14 | 1.44 |
| RoNW (%) | 3.50% | 2.93% | 12.14% | 2.08% | 2.69% |
| Net Asset Value (₹) | 66.17 | 57.25 | 63.82 | 55.76 | 54.7 |
| Post Issue share Cap | 53.64 | ||||
| FV in Rs. | 2 | ||||
| IPO price | 336 | ||||
| EPS post IPO FY22 | 7.32 | ||||
| PE | 45.9 | ||||
| EPS post IPO FY23 ann | 8.8 | ||||
| PE FY23 ann | 38.4 | ||||
| Market Cap Rs. Cr. | 9011 | ||||
| Market Cap/Sales | 4.16 | ||||
| P/BV |
Salient Points: Global Health IPO | Medanta IPO
- From the 500 cr fresh issue proceeeds for Rs. 375 will go towards debt repayment.
- After planned expansion of beds , share of flagship Gurgaon hospital which is 56%, will reduce to ~40%, diversifying its basket of hospitals.
- In FY2021, Medanta took out-patient department pharmacies in-house at its Gurugram, Lucknow, Indore, and Ranchi hospitals, and launched outpatient department pharmacy at south Delhi clinic and home care services in Gurugram as well as New Delhi.
Concerns
- Concentration risk. Gurugram hospital contributes 56% at present.
- Failure to maintain, attract or improve occupancy rates may result in an under utilization of capital expenditure and reduce profits.
- Performance is highly dependent on doctors, nurses, and other healthcare professionals.
Peers: Global Health IPO | Medanta IPO
| Company | CMP | FV | FY22 Income (Rs. Cr) | OPM% | NP (₹ Cr) | PE (TTM) | RONW % | Mkt cap/sales |
| Global Health Ltd | 336 | 2 | 2,205.82 | 21.40 | 196.2 | 42.28 | 12.14% | 4.16 |
| Apollo Hospitals Enterprises Ltd | 4,401 | 5 | 14,740.80 | 15.00 | 1,108.36 | 71.5 | 18.86% | 4.3 |
| Fortis Healthcare Ltd | 10 | 5,744.95 | 17.90 | 789.95 | 52.4 | 11.27% | 3.7 | |
| Max Healthcare Institute Ltd | 10 | 4,058.82 | 26.70 | 605.05 | 47.5 | 9.63% | 10.9 | |
| Narayana Hrudayalaya Ltd | 10 | 3,735.88 | 17.80 | 342.12 | 40.6 | 22.97% | 3.99 |
Medanta compares well on various parameters with peers though it is not cheap.
Global Health IPO | Medanta IPO: Assessment
- Global Health hospital at Gurugram was ranked as the best private hospital in India for 3 consecutive years in 2020, 2021 and 2022, and was the only Indian private hospital to be featured in the list of Top-200 global hospitals in 2021 and was featured in the list of Top-250 global hospitals in 2022 by Newsweek.
- As at March 31, 2020, Medanta had 2,141 installed beds, which grew to 2,467 installed beds as at June 30, 2022, representing a growth of 15.23%. Upon operation of their Noida hospital, Medanta expects domestic and international patients as part of its strategy to capitalize on medical tourism.
- Medanta has a strong presence in multi-specialty tertiary care. 28% of 1,866 operational beds are ICU beds, due to which average revenue per operating bed (ARPOB) is ~ Rs. 59,000 per day, higher than its listed peers.
- If we compare its performace now vs pre covid leve;s, FY22 occupancy moved to 60%, from 55% pre-covid in FY20.
- Further in this period EBITDA margin went up to 22% from 15%.
- Medanta to become net debt free post IPO.
- Current installed beds as of June 30, 2022 is 2467. These are likely > 3,500 by Fiscal 2025 as operation of Noida Hospital starts.
- There was good response to Medanta anchor issue.
- In general Hospital shares historically gave not given good listing gains. Recently listed Rainbow hospital was in -ve territory for quite some times but later handsomely recovered on back of god results and investor interest.
- The TTM EPS on post-issue equity works out to Rs 7.95. At the upper price band of Rs 336, P/E works out to 42.28. Its peers like Apollo Hospitals traded at TTM P/E of 73, Fortis Healthcare at TTM P/E of 50, Max Healthcare at 68 and Narayana Hrudayalaya at TTM P/E of 42.44.
- The issue could be OK for long term perspective. I have a slightly positive bias on the Global Health Ltd (Medanta) IPO.
Global Health IPO | Medanta IPO : Apply or Not
Risk : Moderate
Expected Reward : Low profit, no profit or small loss. t
Listing Gains : Not sure Current GMP ~ Rs. 15-20
Hold for Medium/ Long Term: Looks OK in long run.
Subscription : QIB figure will be watched. Others will follow.
I may apply for Global Health IPO | Medanta IPO on Day3. Will apply only if good QIB traction on Day 3 along with HNI response. Qunatum depends on response else will put in small application.
Above are my views only. Please do your own diligence.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.