The initial public offering (IPO) of Shalby Hospital, which opened on Tuesday, was subscribed 0.2 times, or 20%, with investors bidding for 29.31 lakh shares of the 1.45 crore shares on offer. The qualified institutional buyers bid 14.09 lakh shares on the opening day of the IPO. High Net-worth Individuals (HNIs) bid for 29,820 shares and retail investors bid for 14.62 lakh shares. On Monday, Shalby Hospital Limited raised `150 crore from 11 anchor investors by allotting 60.7 lakh shares. Anchor investors include Goldman Sachs, Citigroup, Reliance Nippon Life Insurance Company, Axis Mutual Fund, IIFL, Nomura, Avendus and SBI Life Insurance Company.
At the higher end of the price band of `248, the issue is priced at 42.8x its FY17 earnings and 41.1x its EV/EBITDA. At this valuation, the equity brokerage Centrum believes that the issue of Shalby is attractively priced compared to close peer Narayana Hrudayalaya trading at 72x P/E and 27.1x EV/EBIDTA. “Shalby’s RoE of 26.6 % is better compared to peers’ average of 11.8% for FY17,” said Alpesh Thacker and Payal Pandya in a Centrum Report. However, the first day subscriptions at 20% is only better than that of the Khadim India issue, which recorded 14% subscription on the first day, among offers in the recent past. Offers in the past two months by HDFC Standard Life Insurance, New India Assurance, Mahindra Logistics and Reliance Nippon Asset Management Company got subscribed by a far higher 46%, 104%, 48% and 463%, respectively, on the first day.