Jupiter Life Line Hospitals IPO to open on September 6; price band at ₹695-735/sh

• The issue consists of a fresh issue worth ₹542 crore and an OFS of up to 4.45 million shares.
• Investors can bid for a minimum of 20 Equity Shares and in multiples of 20 thereafter.
• Net proceeds will be used towards loan payments and general corporate purposes.

Jupiter Life Line Hospitals’ ₹869 crore initial public offer (IPO) will open on September 6 and close on September 8. It has set a price band at ₹695-735 per equity share.

Investors can bid for a minimum of 20 equity shares and in multiples of 20 thereafter.

The issue consists of a fresh issue of equity shares worth up to ₹542 crore and an offer-for-sale (OFS) of up to 4.45 million equity shares. The promoters are not selling any shares in the OFS.

The company had undertaken a private placement of 1.67 million shares at ₹735 per equity share aggregating to ₹123 crore in a pre-IPO placement. Consequently, the fresh issue size was reduced from ₹665 crore to ₹542 crore.

The company intends to use net proceeds from the fresh issue towards re-payment or pre-payment, in full or part, of borrowings availed from banks and general corporate purposes.

ICICI Securities, Nuvama Wealth Management and JM Financial are the book running lead managers and KFin Technologies is the registrar to the offer. The shares are proposed to be listed on BSE and NSE.

About the company

The company has three hospitals with a total capacity of 1,194 hospital beds as of March 2023. It has been operating for over 15 years as a corporate quaternary care healthcare service provider with hospitals in Thane, Pune and Indore under the ‘Jupiter’ brand.

It’s also in the process of developing a multispecialty hospital in Dombivli, Maharashtra, with over 500 beds.

The company is led by founder, CMD Dr Ajay P Thakker who has over three decades of experience in the field of medicine and healthcare.

Some of its listed peers are Apollo Hospitals, Fortis Healthcare, Max Healthcare, Narayana Hrudayalaya, Krishna Institute of Medical Sciences and Global Health.

Financials & risk factors

Its revenue from operations has been growing steadily – growing by 21.6% in FY23 and by 50.8% in FY22, as compared to the year before. Its net profit grew 43% in FY23 as compared to FY22, while it posted losses in FY21.

Source: RHP

The company said that it’s significantly dependent on its Thane hospital, and public interest litigations have been initiated against this hospital in relation to the land.

Apart from being heavily dependent on its ability to attract or retain doctors and nurses, it also operates in a highly regulated market, and any changes or violations can adversely affect it. Pricing regulations and related government reforms can affect its operations.

Its bed occupancy rate is lower than the majority of listed peers and it might have to offer services at discounted and competitive rates to increase them. Its inability to pass on high expenses of medical equipment, manpower cost and mre can impact its business.

They rely on third parties like suppliers, insurance companies, third party administrators and more and any termination, non-renewal or breach can have a material adverse impact on its business.

Medical errors, malpractice, negligence, or misconduct by its staff or by third parties that provide products or services such as diagnostic tests, drugs, devices or equipment – can affect its operations. Its patients may contract serious communicable infections or diseases at its hospitals.

Its promoters and promoter group will retain significant shareholding in the company after the offer, which will allow them to exercise significant influence over it. Some of its promoters and directors may have interest in entities or one or more ventures that can result in conflict of interest with us.

The company, its promoters and directors are involved in two criminal proceedings, three tax proceedings and 13 material civil litigations.