Yatharth Hospital & Trauma Care Services IPO subscribed 36x

• The retail portion of the issue was subscribed 8.3 times on day 2.
• The QIB portion of the issue was subscribed 85 times over the shares on offer.
• The net proceeds will be utilised to repay or prepay borrowings, fund capex, general corporate purposes and more.

The public issue of Yatharth Hospital & Trauma Care Services was subscribed by 36 times the shares on offer, on the last day of the issue.

The retail portion of the issue was subscribed by 8.34 times, and non-institutional investors subscribed by 37.22 times. Qualified Institutional Buyers (QIBs) bid aggressively on the third day of the issue, and this portion was subscribed 85 times.

The public issue consists of fresh issue aggregating up to ₹490 crore and offer for sale of equity shares aggregating up to ₹197 crore.

The company has fixed the price band for its equity shares at ₹285-300 per share, allowing bids for a minimum of 50 equity shares and in multiples of 50 thereafter.

The net proceeds from the fresh issue will be utilised to repay or prepay borrowings, fund capex, towards funding inorganic growth initiatives through acquisitions and other strategic endeavours; and for general corporate purposes.

Source: BSE

About the company

Yatharth Hospital and Trauma Care Services is a multi-care hospital chain which was incorporated in 2008. It operates through its super specialty hospitals situated in Delhi NCR - Noida, Greater Noida, and Noida Extension, Uttar Pradesh.

Its Noida Extension hospital has 450 beds and is one of the largest hospitals in the area. It acquired a multi-specialty hospital in Orchha, Madhya Pradesh near Jhansi, which commenced operations in April 2022. The company's total bed capacity is now at 1405.

Reasonable valuation, say broking firms

“With healthy financials along with growth potentials in Northern India, we recommend ‘subscribe’ to the issue,” says a report by Nirmal Bang Securities. It believes that the issue is being offered at a reasonable valuation of 20.9x FY23 enterprise value/EBITDA as compared to its peers.

“Considering its consistent topline growth, stable margins, strategic acquisition, revival of medical tourism, and promising industry outlook, we assign a ‘subscribe’ rating on a medium to long term basis,” says a note by Geojit.

Canara Bank Securities however believes that there can’t be an apple-to-apple comparison with the hospital that’s concentrated in Delhi.

“Majorly, their revenue contributes 34% from government deals which can stretch the debtor days and margin as well. Hence, we recommend subscribing to the issue for listing gains,” it said.