Manipal Health Enterprises makes solid stock market debut; shares list at 11% premium

Shares of Manipal Health Enterprises made a strong stock market debut on Wednesday, 5 August, as the leading hospital chain was listed at Rs 655 on BSE, a premium of 11.02 over the issue price of Rs 590. Similarly, the stock was settled with a premium of 10.51 per cent over the given issue price at Rs 652 on NSE. Investors made a profit of Rs 1,625 on each lot.

Listing of Manipal Healthcare Enterprises has been above the expectations. Ahead of its listing, Manipal Health Enterprises shares saw a sharp correction in their grey market premium (GMP), despite the improving market sentiments. Last heard, it was commanding a GMP of Rs 3-5 per share, suggesting a flat listing for the investors.

The IPO of Manipal Health Enterprises ran for subscription between July 29 and July 31. It had offered its shares in the price band of Rs 560-590 per share with a lot size of 25 shares. The company eyed to raise a total of Rs 9,275 crore via IPO, which included a fresh share sale of Rs 8,000 crore and an offer-for-sale (OFS) of up to 2,16,13,834 equity shares worth Rs 1,275 crore.

Mahesh M. Ojha, VP of Research at Kantilal Chagganlal Securities, who was expecting a muted listing, said, "Allotted Investors may consider booking profits on any meaningful listing gains. Fresh investors are advised to wait for 1–2 quarters to gain better visibility on earnings growth, operational improvements, and a more attractive valuation before considering an entry."

The issue of Manipal Health Enterprises was overall subscribed nearly 4.92 times with nearly 3.60 lakh applications. The qualified institutional buyers’ portion was subscribed 8.25 times. The quotas for non-institutional investors and employees were subscribed 1.02 times and 2.19 times, respectively, while the retail portion was subscribed only 93 per cent.

Prasenjit Paul, Fund Manager at 129 Wealth & Head of Research at Paul Asset, said, "Investors seeking listing gains may find the risk-reward unfavourable at the issue price. Those with a two-to-three-year horizon can monitor these execution triggers, because the present valuation leaves little margin for disappointment."

Incorporated in 2010, Bengaluru-based Manipal Health Enterprises is a healthcare service provider with a network of multi-speciality hospitals, clinics and diagnostic centres across the country. It offers tertiary and quaternary care, organ transplants, oncology, cardiology, neurology, orthopaedics and preventive healthcare services.

Brokerage firms suggested to apply for this issue from a long-term perspective. Kotak Mahindra Capital, Axis Capital, Goldman Sachs (India) Securities, Jefferies India, JP Morgan India, UBS Securities India and DBS Bank were appointed the book-running lead managers to the issue, while Kfin Technologies Ltd served as the registrar.