GPT Healthcare IPO: All You Need To Know

East-India based hospital chain GPT Healthcare Ltd. is launching its initial public offering on Feb. 22.

The IPO is for Rs 525 crore, comprising a fresh issue of Rs 40 crore and an offer for sale of 2.61 crore shares, which would be around Rs 485 crore.

The price range for the IPO is Rs 177 to Rs 186 per share, with a minimum application lot size of 80 shares.

Of the total IPO size, 50% is reserved for qualified institutional buyers, 35% for retail individual investors, and the remaining 15% is to be allotted to non-institutional investors.

Issue Details

• Issue opens: Feb. 22.

• Issue closes: Feb. 26.

• Total issue size: Rs 525 crore.

• Face value: Rs 10 apiece.

• Fixed price band: Rs 177-186 per share.

• Minimum lot size: 80 shares.

• Listing: NSE and BSE.

Use Of Proceeds

The net proceeds from the issue will be utilised towards:

• Repayment or prepayment, in part or full, of certain borrowings worth Rs 30 crore. The company has a debt of Rs 46.3 crore as on December 31, 2023.

• General corporate purposes.

Business

The company owns a chain of mid-sized full service hospitals under the brand name ILS Hospitals, in East India.

As of September 30, 2023, it operates four multispecialty hospitals in Dum Dum, Salt Lake and Howrah in West Bengal and Tripura's Agartala, with a total capacity of 561 beds.

It provides healthcare services across over 35 specialties and super specialties, with the hospitals having integrated diagnostic services and pharmacies.

The company's average revenue per occupied bed as on September 2023 was Rs 32,979, while the bed occupancy is at 59.92%.

The company is also planning to set up two greenfield projects in Raipur, Chhattisgarh and Jharkhand's Ranchi, with a bed capacity of 152 beds and 140 beds, respectively.

Key Metric Peer Group Review

Risk Factors

• 70% of the company's revenue is from hospitals in West Bengal. Any change in the economic or political conditions there, could impact revenues.

• Competition from regional and pan-India players. Also, other multi-specialty competition offer radiation oncology, while the company doesn't.

• Bed occupancy rate at 59.92% as on Sept. 30 and 58.92% as on March 31, 2023, is lower than listed peers.

• Healthcare professionals are engaged on a consultancy basis. As on Sept. 30, full-time consultants are 91, while visiting consultants are 481. Failure to retain them is a risk.

• Heavy dependency on certain specialties for revenue. Top 10 specialties contribute to 90.4% of revenue as on Sept 30.

• Estimated completion dates of new hospitals at Ranchi and Raipur is 2026 and 2025, respectively. Any delays may have a negative impact on financials and cash flow. Also, failure to obtain licenses could be a risk.

• Pendency of certain regulatory and statutory permits and licenses for the Dum Dum, Howrah and Agartala hospitals.