Shalby Limited IPO: Brokerage Views & Run up to IPO

Shalby LimitedThis post on Shalby Limited IPO tries to bring out consolidated brokerage views opinions, IPO Review / Analysis, Note/ reports and recommendation of brokerages , Analyst, Business New papers, Management views, information on Anchor investors, Subscription etc on Shalby Limited IPO and shall be updated continuously till the closure of the issue. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Shalby Limited IPO or not.

Subscription: Shalby Limited IPO  ( x times)
  QIB NII Retail Emp Total
Day 3  4.34  0.42  2.98 1.44  2.82
Day 2   0.34  .02  .71 .62  .46
Day 1 0.34 0.01 0.2 0.24 0.2
Total Applications at close= Application wise Subscription=
Related Posts: Shalby Limited IPO Review and Peer group Comparison
Shalby Limited IPO: Grey Market Premium etc.

05/12/17 Grey Market Premium:  No significant deals

Complete Anchor List

Anchor Investors (AIs) portion in the Public Issue of Shalby Limited Limited, for 60,70,150 equity shares have been subscribed today by 11 AIs at Rs. 248/- per equity share The Anchor Investors include: Goldman Sachs, Axis Mutual Fund, Nomura Singapore Ltd. HSBC Global Investment Funds etc.

Click here for Complete Shalby Limited Anchor Investors List

Consolidated opinion of Brokerages, Analysts, Business New Paper Reports, Management Views on Shalby Limited IPO .

Angel Broking: ” At the upper end of the price band (`245-`248), the issue is priced at 42.8x of its FY2017 earnings vs. Apollo hospitals (73.7x) and Healthcare Global (121.2x). On EV per bed, it is available on 3.8x vs Apollo (2.3x) and Healthcare Global at 2.1x. We like its growth story, better returns profile than peers and strong growth prospects ahead.”

Centrum:At this valuation, the issue is attractively priced compared to a close peer Narayana Hrudayalaya which is trading at 72 times P/E and 27.1 times EV/Ebitda. Shalby’s RoE of 26.6 per cent is better compared to peers’ average of 11.8 per cent for FY17. Considering robust growth, high return ratios, strong balance sheet and future prospects, investors can be advised to subscribe to the issue. There is an underlying assumption that Shalby would maintain healthy growth rates going ahead “

Capital Market: “Score 41/100, The diluted equity share capital of the company stands at Rs 108.02 crore of face value of Rs 10. EPS for FY 2017 works out at Rs 5.8. At the higher price band of Rs 248, The P/E on FY 2017 diluted EPS works out to 42.8. There has been inconsistency in the bottom-line growth of the company in the past due to company’s spending for expansion in multi speciality projects and new project attaining breakeven levels. Such trends will continue as it is still spending for new capacities.”

Choice Broking:Strong fundamentals; At the higher price band of Rs248, SHL’s share is available at a P/E multiple of 42.8(x) which is at a discount to its peer’s P/E(x) (Apollo Hospitals – 67.7x, Narayana Hrudayalaya – 90x and Healthcare Global – 118.4x).

Dalal Street Investment Journal: ” rating 49/100; Looking at the growth in revenue and profitability, we can say that the company is doing well. As expansion plans are in process, we expect growth to be at slower pace and margins would be under pressure. The company follows an asset-light model which helps it in controlling the operating costs. The government has focused on healthcare and increased the health budget this year. But, Government has capped prices of knee implant which could be risky for the industry. We see that the overall healthcare and hospitality industry has good prospects. The company’s valuations are fair and thus, considering all these factors, investors can subscribe for the IPO but with limited exposure and long term view.”

GEPL Capital: “Shalby Limited stands to gain from operating leverage. At a P/E of 34xs of FY17 Earning. We believe that Shalby has a unique business model and strong growth metrics which will make them lucrative.We assign a Subscribe rating to the IPO.”

Hem securities: “ Subscribe; The firm has nine operational hospitals with an aggregate operational bed count of 841 beds. It has 15% market share of all joint replacement surgeries conducted by private corporate hospitals in India in 2016. At price band of Rs 245-248 /share at p/e multiple of 46-47. The firm has leadership in orthopedics with integrated and scalable business model enhancing patient reach and is experienced player with longstanding presence”

KR Choksey: ” The company has a strong brand equity in Gujarat and other emerging areas and has a seen significant growth in inpatient and outpatient volumes across its hospital network. The company has a scalable business model with a key focus and good market share in orthopaedics. With a Current a P/E multiple of 42.8 the stock is avaibale at a discounted price when compared to its peer (Apollo Hospitals – 67.7x, Narayana Hrudayalaya – 90x and Healthcare Global – 118.4x). The company currently has 11 multi-specialty hospitals and it is planning to expand its business in northern and eastern India which help to boost the long term profitability of the business. Hence, with strong fundamentals and cheaper valuations the stock seems to be attractive. So, we recommend “ Subscribe” rating for the long term view.”

Prabhudas Lilladher: “We recommend “SUBSCRIBE” with a longer term investment horizon because of better profitability and superior return ratios than the peers. However, we believe it is a value investment from long term perspective rather than any short term gains, since the margins in near term will be under pressure due to addition of newer hospitals.”

Reliance Securities: “At the upper end of the price band (Rs248), the stock is valued at P/E ratio of 42.8x FY17 earnings. Notably, Apollo Hospitals, Narayana Hrudayalaya and HCG trade at 69.1x, 73.0x and 109.2x of FY17 EPS, respectively. Thus, the valuation looks reasonable compared to its peers. We believe the Indian hospitals industry is poised to grow in favour of the organised sector with rising affordability, awareness and increasing medical/health insurance penetration. Shalby’s growth prospects appear to be promising in medium to long-term on the back of sustainable business model and strong earnings visibility. Thus, we recommend SUBSCRIBE to the Issue.”

Rudra Shares: “Considering, higher RONW amongst its peers with delivering higher EBITDA & PAT margins, company’s forthcoming expansion plans combined with reduction in debt plans, initiatives to improve operational efficiencies, we foresee growth for the company . Considering all these factors, we recommend to SUBSCRIBE the IPO with long term perspective.”

SMC : “Rating 2/5 ; Considering the P/E valuation on the upper end of the price band of Rs. 248, the stock is priced at pre issue P/E of 35.71x on its FY17 EPS of Rs. 6.95. Post issue, the stock is priced at a P/E of 43.50 x on its EPS of Rs. 5.70. Looking at the P/B ratio at Rs. 248 the stock is priced at P/B ratio of 8.27x on the
pre issue book value of Rs.29.97 and on the post issue book value of Rs. 69.04 the P/B comes out to 3.59x.”

SPA Securities: “Since FY12, the company has experienced a steady growth in providing orthopedic and non-orthopedic healthcare services, maintaining higher margins and RoE than its peers because of several cost efficiency measures, such as procurement of medical consumables, lower capital expenditure per bed, higher beds to operation theatre, and better space utilization. This helps the company achieve EBITDA positive levels for new hospitals in less than two years. The company’s revenues, EBITDA and PAT have grown at a CAGR of 7.9%, 5.1% and 16.8% respectively, between FY14-17. The company has showcased healthy EBITDA margins in the range of 20-25% consistently. At the upper price band of INR 248/share, the issue is valued at a PE of 35x with FY17 Adj.EPS of INR 7.0. We recommend to SUBSCRIBE to the issue as a good long term investment.”

SP Tulsiyan website: “While the company seems to be built on a strong foundation, it is yet to reap the fruit of its labour, as new hospitals mature over the next 2-3 years. No doubt it is better among the lot and valuation is also not too aggressive, but immediate upside may be limited. Over the longer term, the stock can be better rewarding.”

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