Jupiter Life Line Hospitals IPO sails through on day 2, Retail & NIIs portion fully booked

The Rs 869 -crore initial public offering (IPO) of Jupiter Life Line Hospitals continued to witness a decent response from the investors during the second day of the bidding process as the issue got fully subscribed, thanks to retail and non-institutional investors. The issue was booked 90 per cent by the end of day 1. Jupiter Life Line Hospitals is selling its shares in the range of Rs 695-735 apiece during the three-day bidding process and investors can make a bid of a minimum of 20 equity shares and its multiples thereafter. The issue includes a sale of fresh equity shares worth Rs 542 crore, while an offer-for sale (OFS) of up to 44.50 lakh equity shares worth Rs 327.08 crore. According to the data, the investors made bids for 91,71,880 equity shares, or 1.08 times, compared to the 84,97,169 equity shares offered for the subscription by 10.30 am on Wednesday, September 7. The issue, which had opened on Wednesday, September 6, will close for bidding on Friday, September 8. The allocation for non-institutional bidders fetched 1.75 times bids, while the portion of retail investors saw a subscription of 1.39 times. However, the portion reserved for the qualified institutional bidders (QIBs) was subscribed only one per cent as of the same time. Jupiter Life Line Hospitals is among multi-specialty tertiary and quaternary healthcare providers in the Mumbai Metropolitan Area and western region of India with a total bed capacity of 1,194 hospital beds across three hospitals as of March 31. Jupiter Life Line Hospitals currently operates three hospitals in Thane, Pune and Indore under the 'Jupiter' brand. Ahead of its public issue, the company raised Rs 260.72 crore from 39 anchor investors, including Abu Dhabi Investment Authority, Goldman Sachs, Nomura Funds, Government of Singapore, HSBC Global and Fidelity Funds, among others, by allocating 35.47 lakh equity shares at an issue price of Rs 735 apiece. Brokerage firms are mostly positive on the stock and suggested a bid for the issue amid the advantage of regional dominance, operational efficiency, Jupiter Hospital has demonstrated good financial performances among peers. However, they also flagged dependence on Thane hospital, change in government policies, and delay in upcoming projects may dent its prospects. The issue is priced at a P/BV of 11.41 times 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, said Reliance Securities, with a 'subscribe' for the long term rating. Jupiter Life Line has delivered healthy financials with 24.5 per cent revenue growth and 34.6 per cent EBITDA growth between FY20-23. Overall EBITDA margin has improved to 22.6 per cent in FY23. ROE and ROCE stood at healthy levels of 20.1 per cent and 20.5 per cent in FY23 which are largely in line with average performance of listed peers, said Nirmal Bang Securities with a 'subscribe' tag. The company has reserved half of the issue, or 50 per cent equity shares, for qualified institutional bidders, while non-institutional investors will get 15 per cent of the allocation in the primary offering. Remaining 35 per cent shares shall be reserved for the retail investors of the issue. At the upper price band, Jupiter Life Line is available at a P/E of 66 times (FY23), which seems relatively high when compared to its peers. However, several favourable factors, including the increasing healthcare spending, growing medical tourism, and expanding health insurance adoption, are positive indicators for branded hospital chains in India, said Geojit Financial Services. "It has an established regional presence, a debt-free status post-IPO, and a robust financial performance compared to its competitors. Moreover, the company's expansion plans in Western India hold promise for future growth," it added with a 'subscribe’ rating for the issue on a short- to medium-term basis. ICICI Securities, Nuvama Wealth Management and JM Financial are the lead managers to the issue, while Kfin Technologies India has been appointed as the registrar to the issue. Shares of the company will be listed at both exchanges- BSE and NSE- with September 18, Monday, as the tentative date of listing.Disclaimer: Under no circumstances should any person at this platform make trading decisions based solely on the information discussed herein. You should consult a qualified broker or other financial advisor prior to making any actual investment or trading decisions. All information is for educational and informational use only. Business Today does not guarantee, vouch for, endorse any of its contents and hereby disclaims all warranties, express or implied, relating to the same.

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