GPT Healthcare: GPT Healthcare has promising prospects, but wait for listing to get clearer picture
Business: Set up in 2000 as an eight-bed hospital at Salt Lake in Kolkata by laparoscopic surgeon Dr Om Tantia, the company now operates four secondary and tertiary care hospitals in Dum Dum, Salt Lake and Howrah in West Bengal and Agartala in Tripura with a total capacity of 561 beds. Each of these hospitals provides integrated diagnostic services and pharmacies. It has signed MoUs for setting up hospitals in Raipur, Chhattisgarh, and Ranchi, Jharkhand that are likely to be operational in 2025-26. The management has plans to expand operations in other tier-II cities such as Varanasi, Patna, Guwahati, Kanpur and Cuttack. However, new hospitals have longer gestation periods to mature and provide returns.
Financials & Growth Prospects: The company’s revenues have grown at a three-year compounded annual growth rate (CAGR) of 22% to ₹361 crore for FY23. The net profit has nearly doubled to ₹39 crore. The operating profit (Ebitda) margin has been over 21% during the last three years. For the six months ended September 2023, the company’s average revenue per operating bed stood at ₹32,979 and the bed occupancy rate at 60%. The IPO will allow the company to cut down its debt and finance costs and improve its bottom line.
Valuations: There have been several healthcare companies that have taken the IPO route after the Covid-19 pandemic and have done well post-listing. GPT Healthcare is operating and growing its business in under-served markets in eastern India. However, at an implied market capitalisation of over ₹1,500 crore, the IPO values the company at 32.5 times its estimated FY24 earnings – which is fully pricing in the size and scale of the company when compared to other recently listed hospital companies such as Jupiter Lifeline and Yatharth Hospitals. Instead of investing in the current rallying markets, long-term investors can wait for a better price discovery after the listing.
RAISES Rs 157.5 CR FROM ANCHORS
GPT Healthcare raised ₹157.54 crore from anchor investors on Wednesday ahead of its IPO. The company offered 8.4 million shares at ₹186 each. Kotak Mutual Fund, Axis MF, Bandhan MF, Aditya Birla Sun Life Insurance, and Societe Generale were among investors participating in the round.
(You can now subscribe to our ETMarkets WhatsApp channel)
Download The Economic Times News App to get Daily Market Updates & Live Business News.
Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.
Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
#GPT #Healthcare #GPT #Healthcare #promising #prospects #wait #listing #clearer #picture