Inventurus Knowledge Solutions IPO kicks off, GMP firm; should you subscribe or give IKS Health a miss?

IKS Health IPO: The Rs 2,498 crore issue by the technology-enabled healthcare solutions provider Inventurus Knowledge Solutions has opened for public subscription today. The IPO is an offer for sale (OFS) of up to 18,795,510 shares, with employee reservation of up to 65,000 shares. The price band for the issue is fixed at Rs 1,265-1,329 apiece.

If the IPO sails through, the company would command a market capitalisation of Rs 22,802 crore at the upper end of the price band. Last heard, Inventurus Knowledge Solutions was commanding a grey market premium of Rs 422 apiece, which was 31.75 per cent higher than Rs 1,329, the upper limit of the IPO price band.

Based on annualised FY24 earnings and fully diluted post-IPO paid-up capital, the company is asking for a PE of 54.66 times, which seems fully-priced looking at the company’s financial growth trajectory, said Rajan Shinde, Research Analyst at Mehta Equities.

"The short-term dip in Ebitda margins, attributed to the acquisition integration, is expected to improve as synergies materialize. But as there is no listed peer to compare in similar business, we think the company may command premium valuation. Investors should also look at IPO offer, which come with 100 per cent OFS, which is an area of concern for new investors. As it is backed by long-standing client relationships, IKS is well-positioned to capitalise on the growing demand for integrated healthcare solutions," Shinde said.

This analyst recommended 'subscribe' on the issue for a long-term perspective.

Ahead of its IPO, Inventurus Knowledge Solutions raised Rs 11,20.18 crore from 61 anchor investors at  Rs 1,329 per share. They included Fidelity Funds, Government Pension Fund Global, Abu Dhabi Investment Authority, Prudential Hong Kong, WF Asian Reconnaissance Fund, Destinations International Equity Fund, TIMF Holdings and HSBC Global, among others.

A total of 33.33 per cent of the total allocation to anchor investors was allocated to 12 domestic mutual funds, which applied through a total of 23 schemes.

In a brief note, Swastika said Inventurus Knowledge Solutions is a leading partner for outpatient and inpatient care organisations and has history of healthy financial performance with growth and improving margins It has no listed peers and that since the IPO is an OFS, the company would not receive any proceeds from the IPO. It said the IPO is suitable for long-term investors.

As of September 30, 2024, IKS served more than 778 healthcare organizations, encompassing health systems, academic medical centers, multi-specialty and single-specialty medical groups, ancillary healthcare organizations, as well as both outpatient and inpatient healthcare delivery providers. Key clients include Mass General Brigham Inc., Texas Health Care PLLC, and The GI Alliance Management.