ISSUE DETAILS :
Issue opens / closes on
|
05-12 / 07-12-2017
|
Issue Size
|
Rs 580 cr
|
Face Value
|
Rs 10
|
Price
|
Rs 245-248
|
BUSINESS
|
Multi speciality hospital chain
|
Promoters
|
DR VIKRAM SHAH, DR DARSHINI SHAH, SHANAY SHAH, ZODIAC MEDIQUIP LIMITED AND SHAH FAMILY TRUST
|
LISTINGS
|
Bse, Nse
|
BRLMs
|
Edelweiss, IIFL Holdings, IDFC Bank
|
REGISTRAR
|
Karvy
|
BUSINESS :
Shalby is an Ahmedabad based multi-specialty hospital chain. The hospitals are tertiary care hospitals, few of which also offer quaternary healthcare services to patients in various areas of specialisation such as orthopaedics, complex joint replacements, cardiology, neurology, oncology, and renal transplantations. As on Sep 2017, Shalby provides inpatient and outpatient healthcare services through 11 operational hospitals with an aggregate bed capacity of 2,000 beds.
OBJECTS OF THE IPO :
Company proposes to utilise the Net Proceeds from the Fresh Issue towards the following objects:
1. Repayment of certain loans - Rs 300 cr.
2. Purchase of medical equipments.
3. Purchase of interiors, furniture and for allied infrastructure.
4. General corporate purposes.
QUALITATIVE FACTORS:
- Leadership in orthopaedics and strong capabilities in other specialties.
- Integrated and scalable business model enhancing the patient reach.
FINANCIALS : (Rs in crores)
31-03-2017
|
31-03-2016
|
31-03-2015
| |
Revenues
|
332
|
292
|
277
|
Capital
|
87.4
|
87.8
|
35.3
|
PAT
|
62.5
|
37.5
|
25.7
|
EPS (Rs)
|
7.16
|
4.30##
|
2.94##
|
(##Adjusted after bonus issue.)
RISK FACTORS :
- A significant portion of the revenue, in excess of 70%, is currently generated from two hospitals.
- Dependent on one field of specialty for a substantial portion of the revenue, i.e. orthopaedics.
- Change in government policies that relate to patients covered by government schemes will impact business.
- Net Proceeds would be utilised to repay a loan facility availed by the Company from IDFC Bank, who are one of the BRLMs.
- Contingent liability respect of income tax / sales tax dues amounting to rupees one crore.
- Instances of non-compliances in relation to certain regulatory filings to be made with the RoC in the past.
- The average cost of acquisition of Equity Shares by Dr Vikram Shah, Dr Darshini and Shanay Shah are ₹4.00 per Equity Share.
VALUATION AND RECOMMENDATIONS :
The company post IPO will have equity around Rs 80 cr. For FY 18 the likely EPS on the expanded capital is Rs 8. The offer is made at 30 plus PE which is expensive. There are challenges in scaling up the operations. For sucking the blood of common man / patients, hospitals are under scanner by various state governments. This segment will be highly regulated in the coming years.
AVOID THE IPO.
AVOID THE IPO.