Yatharth Hospitals IPO opens for subscription, GMP rises; should you subscribe to the public issue-

Yatharth Hospitals IPO opens for subscription, GMP rises; should you subscribe to the public issue?

Yatharth Hospital IPO: Yatharth Hospital IPO opened for public subscription on Wednesday, 26 July, and will close on Friday, 28 July. The bidding for anchor investors concluded on Tuesday, wherein the company collected Rs 205.97 crore. The price band for its public issue at Rs 285-300 per equity share of face value Rs 10 each. Ahead of the public issue, Yatharth Hospitals shares’ GMP rose to Rs 55 per equity share, 18.33% over the upper end of the share price on offer.

The IPO comprises a fresh issue of shares up to Rs 490 crore and an offer for sale (OFS) component with promoters and shareholders offloading 65.5 lakh equity shares. The shares are likely to get credited on 4 July, and listed on stock exchanges on 7 July, according to reports. Yatharth Hospital & Trauma Care Services is a private hospital which provides healthcare services and is based out of North India. Its first hospital was set up in Greater Noida in Nov ’10, it has continued to expand. It has four operational hospitals in the northern regions with 1405 beds and as of Mar ’23, it had 609 doctors engaged on panel.

Choice: Subscribe with caution

“Around 80% of YHTC’s operating beds are present in highly competitive market of Delhi-NCR region. Ramraja Hospital is operating at lower bed occupancy levels and is currently loss making. Thus we are cautiously optimistic on the medium-term performance of the company. At the higher price band, YHTC is demanding a P/E multiple of 39.2x (to its FY23 earning), which seems to be in-line to the peer average. Considering the above observations, we assign a “Subscribe with Caution” rating for the issue.”

Reliance Securities: Subscribe

“On FY23 financials, the IPO is valued at 39.2x P/E, 20.9x EV/EBITDA and 5.4x EV/Sales. India’s current healthcare expenditure is largely dominated by private expenditure. North India regions including Haryana, Uttar Pradesh and Uttarakhand have lower than average doctor and nurse density per 10,000 population. This is expected to improve going ahead while favouring the company’s expansion plans. Their recent acquisition of the Jhansi-Orchha hospital is aimed at further expanding into new geographies and growing their presence in the regional healthcare market. They intend to focus on building capabilities for new, more advanced specialties which have high demand in the respective micro markets and deliver a higher ARPOB. In view of strong financials, growth potentials in Northern India, debt free company post IPO proceeds, advanced and patient-friendly facilities we give a ‘SUBSCRIBE’ to the issue.”

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