Yatharth Hospital IPO entails to raise Rs. 687 crore through a mix of fresh issue of equity shares and offer for sale. The IPO includes a fresh issue worth ₹4,900.00 million and an Offer-for-Sale (OFS) of 6,551,690 Equity Shares by existing shareholders- Vimla Tyagi, Prem Narayan Tyagi and Neena Tyagi. The price band is ₹ 285 to ₹ 300, and the IPO size is 50 shares. Yatharth Hospital and Trauma Care Services Limited is a multi-care hospital chain and ranks among the top 10 largest private hospitals in the National Capital Region of Delhi.
About Yatharth Hospital and Trauma Care Services Limited:
Yatharth Hospital and Trauma Care Services Limited (“Yatharth”) was incorporated on February 28, 2008.
Yatharth Noida Extension Hospital and the Greater Noida Hospital is the 8th and 10th largest private hospital in the Delhi NCR respectively, in terms of number of beds in Fiscal 2023.
Currently, the company operates 3 super specialty hospitals in Delhi NCR, i.e., at Noida, Greater Noida and Noida Extension. It has acquired a 305-bedded multi-speciality hospital in Orchha, Madhya Pradesh near Jhansi, Uttar Pradesh which commenced commercial operations in from April, 2022.
It total bed capacity stands at 1,405 beds. Further critical care program comprises 394 critical care beds, as of March 31, 2023. Further, their Noida Extension hospital with 450 beds is one of the largest hospitals in the Noida Extension, Uttar Pradesh region.
It has engaged 609 doctors and offer healthcare services across several specialties and super specialties.
All hospitals are accredited by the NABH while hospitals located at Greater Noida and Noida Extension are also accredited by NABL.
Promoters are Ajay Kumar Tyagi and Kapil Kumar.
The table shows the revenue derived key service segments stated as a percentage of our total revenue:
Particulars
% of Revenue in 2021
% of Revenue in 2022
% of Revenue in 2022
Amount (₹ million) 2023
Medicine
56.27%
50.08%
31.46%
1,636.73
– COVID-19
32.34%
21.23%
0.00%
0
– Non-COVID- 19
23.93%
28.85%
31.46%
1,636.73
Nephrology & urology
6.27%
6.29%
9.09%
472.75
Neurosciences
8.12%
7.75%
9.78%
508.74
General surgery
6.51%
6.50%
8.50%
442.19
Cardiology
7.14%
6.65%
9.78%
508.86
Pediatrics
2.67%
3.69%
5.09%
264.93
Gynecology
3.13%
3.19%
4.43%
230.35
Gastroenterology
1.29%
2.08%
3.03%
157.82
Pulmonology
1.11%
2.83%
4.65%
241.72
Others*
2.75%
5.16%
8.53%
443.66
Total
100.00%
100.00%
100.00%
5,202.93
Yatharth Hospital IPO: Financials
Particulars/ Rs. Cr.
2023
2022
2021
Revenue from Operations
520.29
400.94
228.67
Revenue Growth (%)
29.77%
75.34%
–
EBITDA
133.77
110.81
67.01
EBITDA Margin (%)
25.71%
27.64%
29.30%
Profit before Tax
87.68
63.11
28.12
Profit for the Year
65.77
44.16
19.59
Net Profit Margin (%) as stated
12.64%
11.01%
8.57%
Share Capital
65.52
65.52
16.38
Reserves
117.45
51.37
56.08
Net worth as stated
182.96
116.89
72.46
EPS – Basic & Diluted (₹)
10.09
6.78
2.77
ROCE (%)
26.10%
22.93%
18.43%
ROE (%)
35.95%
37.78%
25.06%
Net Asset Value (₹)
27.93
17.84
11.06
Post IPO Share capital
85.85
FV
10
IPO price
300
EPS Fy23
7.66
PE Fy23
39.16
Market cap in cr.
2576
Market Cap/sales
4.95
Anchor Investors
Investors that participated in the anchor book of the IPO include names like HDFC Mutual Fund, Aditya Birla Sun Life Trustee, Bandhan Mutual Fund, ICICI Prudential, Nippon Life,HSBC Global Investment Funds, SBI Life Insurance, Troo Capital, Carnelian Capital, BNP Paribas Arbitrage, Goldman Sachs, Max Life Insurance, Kotak Mahindra Life, Rajasthan Global securities, Jupiter India Fund etc. The below table is not exhaustive.
Yatharth Hospital IPO: Salient Points
The original size of the fresh issue component was ₹610 crore which was reduced to ₹490 crore after the company successfully completed the pre-IPO placement worth ₹120 crore in July 2013. The pre-IPO round is said to have was well-received by investors, as it was oversubscribed by 1.5 times. The allottes in Pre IPO round were:
S.No.
Name of the allottee
Issue Price (₹)
Number of Equity Shares allotted
1.
Plutus wealth Management LLP
300
2,000,000
2.
Think India Opportunities Master Fund LP
300
1,000,000
3.
Rosy Blue Diamonds Private Limited
300
433,334
4.
Vikas Vijaykumar Khemani
300
333,333
5.
Viraj Russell Mehta
300
233,333
Empanelled with several of the third-party health insurance administrators and the non-life insurance companies, many government organizations including Employees’ State Insurance Corporation (“ESIC”), Central Government Health Scheme (“CGHS”), Ex-Servicemen Contributory Health Scheme (“ECHS”), as well as public sector undertakings and private enterprises.
Present net debt is at Rs. 225 cr. Post-IPO, the company will be a debt-free company. This should aid profitability.
Promoters and promoter group holds 91.34% of the pre-Offer issued and paid-up Equity Share capital. The post IPO shareholding shall be around 66.33%.
The Net Proceeds are proposed to be used as below (Rs. Million)
Particulars
Estimated amount (₹ million)
Repayment/ prepayment, in full or part, of certain borrowings availed by Company
1,000.00
Repayment/ prepayment, of certain borrowings availed by Subsidiaries, AKS Medical & Research Centre Private Limited and Ramraja Multispeciality Hospital & Trauma Centre Private Limited.
1,450.00
Funding capital expenditure expenses of Company for two hospitals, namely, Noida Hospital and Greater Noida Hospital
256.44
Funding capital expenditure expenses of Subsidiaries, AKS and Ramraja, for respective hospital operated by them
1,069.66
Funding inorganic growth initiatives through acquisitions and other strategic initiatives
650.00
General corporate purposes
Balance
The hospitals chain is also looking at Medical tourism.
All its hospitals are super specialty.
Company has plans to increase its bed capacity and expand geographically through inorganic growth.
Its Noida hospitals served as COVID Hospitals during the pandemic. As Covid related revenue fell over the years, Yatharth Hospital was able to increase its non-COVID revenue from Rs 152 crore in Fiscal 2021 to Rs 520 crore in Fiscal 2023. This is a notable achievement. Its FY23 revenue stood at Rs. 520 cr, with nil covid revenue contribution.
Yatharth’s operational bed capacity has increased at 25% CAGR from FY19,.
Revenue has risen at 50% CAGR in same period and is one of the highest in hospital industry.
Its FY23 bed occupancy was low at 45% which was due to acquiring Jhansi based hospital which reported 8% occupancy and was earlier lying shut down. If we exclude Jhansi new acquisition, the bed occupancy stood at 55%. The relatively mature hospitals i.e. the 250-bed Noida hospital reported 88% occupancy and the other 400-bed Greater Noida hospital the same stood at 62%.
Hospital stocks have increasing come under attention of market and have in general inched in past few years.
Company has shown Apollo Hospitals, Fortis Healthcare, Narayana Hrudayalaya, Max Healthcare, Krishna Institute of Medical and Global Health as their listed peers.
Company
FV
CMP
IncomeFye23 cr.
P/E
RONW (%)
Mcap (cr)
Mcap/sales
Yatharth Hospital
10
300
523
39
35.95%
2576
4.93
Apollo Hospitals
5
5,212
16,702
91.5
13.22%
74,943
4.49
Fortis Healthcare
10
340
6,359
49.2
8.13%
25,676
4.04
Narayana Hrudalaya
10
1,050
4,590
35.9
28.44%
21,463
4.68
Max Healthcare
10
611
4,701
53.8
14.89%
59,344
12.62
KIMS
10
1,974
2,223
48.4
20.14%
15,795
7.11
HCG
10
320
1,707
253
3.41%
4,460
2.61
Global Health Limited
2
715
2,759
58.9
13.43%
19,197
6.96
Shalby
10
186
805
29.3
15.60%
2,004
2.49
Average Revenue per Operating Bed (ARPOB), for Yatharth Hospital. was Rs. 26,538 per day and this was up 13% YoY in FY23. While peers like Medanta have a much higher number, Hyderabad based KIMS has about the name number and it clocked 28% EBITDA. Yatharth Hospital EBITDA margin is 26%. KIMS is trading at 48x PE.
On FY23 earnings Yatharth Hospital IPO is valued at 39x P/E.
I intend to apply in Yatharth Hospital IPO. In my view it is not as strong wicket as were some recent IPOs but there are some merits even though returns may be relatively muted than recent IPOs. Its growth rate looks good, sector was been in investors focus and pre IPO has attracted marque investors.
GMP as reported on social media has been around Rs. 75.
On the flip side, the the Delhi-NCR healthcare industry is highly competitive with the presence of many large private and government hospitals. These included Medanta Medicity– Gurugram, Apollo Indraprastha, BLK Max Super Specialty Hospital, Max Super Specialty Hospital Saket, Sir Ganga Ram Hospital, Batra Hospital, Fortis Hospitals, Park Hospitals and Manipal Hospital aming the private ones.
Please do your own diligence. There is good amount of risk in all equity investments including this IPO.
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. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.
