Samco securities limited

Global Health Limited IPO

Add to Calendar 2022-11-03 12:00 AM 2022-11-07 12:00 AM Asia/Kolkata Global Health Limited IPO Global Health Limited India

Global Health Limited

About the Company

Global Health is one of the largest private multi-speciality tertiary care providers operating in the North and East regions of India. It offers services in key specialities of cardiology and cardiac science, neurosciences, oncology, digestive and hepatobiliary sciences, orthopaedics, liver transplant, and kidney and urology.

They operate under the brand name “Medanta” and have a network of five hospitals currently in operation. Along with this, one hospital is under construction. The hospital was founded by Dr Naresh Trehan, a world-renowned cardiovascular and cardiothoracic surgeon.

Objects of the Offer

Offer for Sale: ~Rs. 1,705. 57 crores

Proceeds of the Fresh Issue Rs. 500 crores

·       Investment in 2 of their subsidiaries for repayment/prepayment of borrowings of the subsidiaries: Rs 375 crores

·       General corporate purposes: Remaining amount

Strengths

Facilities Offered: Large-scale hospitals with sophisticated infrastructure, medical equipment and technology. It was designed to comply with JCI requirements and offers all major medical specialities under one roof.

Operational Efficiency: The hospitals are large and accommodate more patients. Its Gurugram hospital has 40 operating rooms, and an installed bed capacity of 1,391 including 285 ICU beds, as of June 30, 2022. They have grown to hospitals with 2,467 installed beds across five cities as of June 30, 2022.

Market Foothold: The Company operates in underpenetrated markets of North and East. Their world-class services enable customers to come to them for all complex treatments.

Strong Team: Dr Trehan is the driving force behind the Medanta brand. They have successfully recruited skilled and experienced healthcare professionals. As of June 30, 2022, the team comprised more than 6,000 medical professionals, including over 1,300 doctors and over 3,700 nurses and over 1,000 paramedical personnel.

Sturdy Financials: Medanta was able to achieve revenue of over Rs. 50 crores in nine specialities indicating the diversified revenue streams across multiple specialities in Fiscals 2020, 2021 and 2022. The Average Revenue per Occupied Bed (ARPOB) for mature hospitals was Rs. 50,302.80, Rs. 47,682.69, and Rs. 54,272.99 for FY20, FY21 and FY22, respectively.

Financial Snapshot

Particulars (In Rs. Crores)

FY2020

FY2021

FY2022

Q1FY22

Q1FY23

Average revenue per occupied bed (ARPOB)

50,166

47,731

54,547

49,124

58,961

Total Income

1,544

1,478

2,205

491

627

EBITDA

230

222

489

105

141

Average occupancy (%)

54.85%

51.57%

60.50%

62.58%

59.57%

Average number of days that patients spent in hospital

3.52 days

3.89 days

3.76 days

4.65 days

3.22 days

 

Risks

·        Geographical concentration risk persists for the company as it has all its hospitals operating in North and East India.

·        The hospital business may see a fall in its revenue due to increased competition faced in the sector. Declining footfall and increased costs will adversely affect the profitability of Medanta.

·        One key resource for hospitals is the medical staff. The hospital will suffer a setback if the company is unable to retain experienced doctors and nurses.

Conclusion

The company has demonstrated that the management can grow the business without sacrificing quality. Global Health has a strong brand image in North India and is now opening a hospital in Noida. In the short term, the additional capital expenditures may reduce operating profit margins.

Despite facing stiff competition, Medanta's long-term prospects look promising, especially given its infrastructure and services. The company is also reasonably priced in terms of valuation. Taking these factors into consideration, we advise investors to 'SUBSCRIBE FOR LONG TERM.'

Issue Detail

  • Issue Open: Nov 03, 2022
  • Issue Close: Nov 07, 2022
  • Issue Type: Book Built Issue IPO
  • Face Value: Rs.2 per equity share
  • Price Band: Rs. 319 to Rs. 336 per share
  • Bid Lot:44 Shares
  • Minimum Order Quantity:44 Shares
  • Listing At: BSE, NSE
  • Issue Size: ~Rs. 2,205 Crores

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