GPT Healthcare IPO: Should You Subscribe to the ₹525 Crore Offering?

  • GPT Healthcare IPO opens Feb 22-26, aims to raise ₹525 crore.
  • Strategic focus on secondary & tertiary care in Eastern India.
  • Strong financial performance: CAGR of 36% in net profit.
  • Brokerage firms recommend long-term subscription.
  • Considerations: Competition, regulatory risks, lack of health insurance.
  • IPO details: Price range ₹177-186 per share, OFS by BanyanTree.
  • Company operates 4 multi-specialty hospitals, total 561 beds.
  • Prominent investors like Societe Generale and Kotak Mutual Fund involved.
  • Proceeds to be used for debt repayment and general corporate purposes.
  • Listing date tentatively set for February 29, 2024.

Introduction GPT Healthcare IPO :

The healthcare business, a critical sector, is seeing significant advancements as GPT Healthcare prepares for its Initial Public Offering (IPO). GPT Healthcare aims to raise ₹525 crore by managing mid-sized multi-specialty hospitals under the ILS Hospitals brand. However, its entry into the public market brings its own set of considerations and assessments.

Investing considerations :

As investors consider whether to participate in the IPO, various factors come into play. Notably, GPT Healthcare confronts intense competition from its listed industry peers, which could have an influence on its market share and overall profitability. Understanding these dynamics is critical to making sound investing decisions.

Subscription Details :

The IPO subscription window opens on February 22 and closes on February 26. Prior to the public offering, GPT Healthcare received ₹157.54 crore from anchor investors, suggesting initial interest. Anchor investors, including Societe Generale and Kotak Mutual Fund, received 84.69 lakh equity shares valued at ₹186 per share.

Broker Recommendations :

Brokerage firms such Anand Rathi Research and Mehta Equities have provided insights and suggestions for the IPO. Anand Rathi Research recommends long-term exposure to the IPO, citing favourable valuation metrics and a good return on net worth. Similarly, Mehta Equities emphasises GPT Healthcare’s regional focus in Eastern India, giving investors with a compelling opportunity.

Key Risks :

While the prospects appear excellent, it is critical to understand the dangers connected with investing in GPT Healthcare. These risks include fierce rivalry in the healthcare sector, regulatory constraints, reliance on borrowings, and the potential consequences of India’s lack of universal health insurance coverage.

Issue Details :

The IPO is priced at ₹177-186 per share, and investors can bid for a minimum of 80 equity shares each lot. A significant amount of the IPO is set aside for eligible institutional buyers, non-institutional investors, and retail investors. Notably, the IPO combines new equity shares with an offer for sale (OFS) from private equity firm BanyanTree Growth Capital II.

Business Overview :

GPT Health was established in 2000 by Dwarika Prasad Tantia, Dr. Om Tantia, and Shree Gopal Tantia. It has grown from an eight-bed hospital in Kolkata to four full-service multi-specialty hospitals with a total capacity of 561 beds. The ILS Hospitals brand provides comprehensive healthcare services across multiple specialisations and super specialties.

Financial Performance :

GPT Healthcare has demonstrated commendable financial performance, with a compound annual growth rate (CAGR) of 36% in net profit and 20.53% in EBITDA for the fiscal year ending FY23. Furthermore, its net profit and revenue for the first six months of FY24 show positive development trends, showing a strong financial condition.

Conclusion :

As GPT Healthcare prepares for its IPO, investors have the opportunity to participate in the company’s growth story. However, careful examination of the company’s competitive environment, financial performance, and strategic positioning is critical. With caution and information, investors may navigate the IPO landscape and make informed selections that match with their investing goals.

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