IPO ANALYSIS : Shalby Limited - Aggressively priced - Avoid

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 :

1. A significant portion of the revenue, in excess of 70%, is currently generated from two hospitals.
2. Dependent on one field of specialty for a substantial portion of the revenue, i.e. orthopaedics.
3. Change in government policies that relate to patients covered by government schemes will impact business.
4. Net Proceeds would be utilised to repay a loan facility availed by the Company from IDFC Bank, who are one of the BRLMs.
5. Contingent liability respect of income tax / sales tax dues amounting to rupees one crore.
6. Instances of non-compliances in relation to certain regulatory filings to be made with the RoC in the past.
7. 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.

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Forthcoming IPO : SHALBY LIMITED

ISSUE DETAILS :

Issue size	Rs 580 cr
Face Value	Rs 10
Promoter	DR VIKRAM SHAH, DR DARSHINI SHAH, SHANAY SHAH, ZODIAC MEDIQUIP LIMITED AND SHAH FAMILY TRUST
Business	Hospital chain - multi speciality
Registrar	Karvy
Listings	Bse, Nse
BRLM	Edelweiss, IIFL Holdings, IFDC Bank

IPO ANALYSIS : SHRADHA INFRAPROJECTS (NAGPUR) LIMITED - Avoid

ISSUE DETAILS :

Issue opens / closes on	27-11 / 30-11-2017
Issue Size	27,04, 000 equity shares
Face Value	Rs 10
Price	Rs 70
BUSINESS	Real estate
Promoters	Sunil Raisoni and Riaan Diagnostic Private Limited
LISTINGS	Nse, emerge
BRLMs	Aryaman Financial Services
REGISTRAR	Big Share

IPO ANALYSIS : ICE MAKE REFRIGERATION LIMITED - INVEST

ISSUE DETAILS :

Issue opens / closes on	28-11 / 30-11-2017
Issue Size	41,60,000 equity shares
Face Value	Rs 10
Price	Rs 57-57
BUSINESS	Refrigeration equipment mfrs / cooling solution providers
Promoters	AJENDRA P. PATEL AND MR. VIPUL I. PATEL
LISTINGS	Nse, emerge
BRLMs	Vivro Financial Services
REGISTRAR	Link Intime

QUALITATIVE FACTORS:

1.Manufacturers of wide range of refrigeration equipments.

2. Well established manufacturing facilities.

3. Experienced Promoters and qualified technical team.

4. Providing customized solutions with a focus on after sales service.

5. Consistently profit making enterprise.

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IPO ANALYSIS : INNOVANA THINKLABS LIMITED - Avoid

ISSUE DETAILS :

Issue opens / closes on	29-11 / 04-12-2017
Issue Size	11,00,000 equity shares
Face Value	Rs 10
Price	Rs 60
BUSINESS	Software development
Promoters	CHANDAN GARG AND MR. KAPIL GARG
LISTINGS	Nse, emerge
BRLMs	Swastika Investments
REGISTRAR	Skyline Financial Services

Remarks : Limited operational history.