Jupiter Life Line Hospitals IPO opens for subscription, GMP up 30%; should you subscribe to the issue-

Jupiter Life Line Hospitals IPO opens for subscription, GMP up 30%; should you subscribe to the issue?

Jupiter Life Line Hospitals IPO: Jupiter Life Line Hospitals IPO opened for public subscription on Wednesday, 6 September, and will close on Friday, 8 September. The bidding for anchor investors concluded on Tuesday, wherein the company collected Rs 260.72 crore. The price band for its public issue at Rs 695-735 per equity share of face value Rs 10 each. At the upper end of the price band, the company’s promoters and shareholders seek to raise Rs 869.08 crore from the IPO. Ahead of the public issue, Jupiter Life Line Hospitals shares’ GMP rose to Rs 218 per equity share, 30% over the upper end of the share price on offer.

The IPO comprises a fresh issue of equity shares worth Rs 542 crore and an Offer-For-Sale (OFS) with promoters offloading 44.5 lakh shares worth Rs 327.08 crore. The company intends to use the net proceeds from the IPO to bolster its capital base, catering to its future capital requirements resulting from business and asset growth. For potential investors, the bidding starts at a minimum of 20 equity shares, with subsequent bids in multiple lots of 20 equity shares each, with a maximum of 13 lots. At the upper end of the price band, the post-issue implied market-cap is Rs 4,819 crore.

Should you apply for the Jupiter Life Line Hospitals IPO?Nirmal Bang: Subscribe

“JLHL has mainly focused on to cater middle and upper middle class households where it observes working class segment with organized sector that supports high possession of medical insurance. JLHL’s has delivered healthy financials with 24.5% revenue growth and 34.6% EBITDA growth between FY20-23. Overall EBITDA margin has also improved from 17.8% in FY20 to 22.6% in FY23. ROE and ROCE stood at healthy levels of 20.1% and 20.5% in FY23 which are largely in line with average performance of listed peers. The issue is valued at reasonable valuation of 22.4x FY23 EV/EBITDA compared to 30.4x FY23 average EV/EBITDA of listed peers. Thus, we recommend ‘SUBSCRIBE’ to the issue.”

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“JLHL is present in the strong MMR region where population is consistently increasing and remains a focused micro market with MMR has 33.0 beds per 10,000 people, which is higher than the state average of Maharashtra (20 beds per 10,000 people). It has an estimated population of 20.96 million. JLHL intends to improve occupancy rates and equipment utilization at hospitals by continuing to maintain and recruit new medical professionals of high caliber in specified fields and focus on clinical excellence. The issue is priced at a P/BV of 11.41 based on its NAV of Rs. 64.39 as of March 31, 2023, post IPO it will be a debt free company and growth in healthcare segment, good patient volumes, cost efficiency, strong financials, and expansion to new areas will drive the company’s performance going forward hence, we recommend to “SUBSCRIBE” the issue from the long term perspective.”

(The recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)