The Park Medi World IPO has been launched and will remain open until December 12. What’s the right strategy for this new issue?
Let’s take a look at the key factors to watch of this ongoing IPO –
Park Medi World IPO: Subscription window, listing and allotment schedule
Investors have until December 12 to apply at a price band of Rs 154-162 per share. The allotment is set for December 15, followed by refunds and share credit on December 16. The IPO will make its market debut on December 17 on both the NSE and BSE.
As per the rules, half the issue is reserved for qualified institutional buyers, at least 35% for retail applicants and the remaining for non-institutional investors. Retail investors need a minimum investment of Rs 14,904 to participate.
Park Medi World IPO: Fund utilisation
Park Medi World is looking to raise Rs 920 crore from the public markets. Most of the money, that is Rs 770 crore comes from a fresh issue of 4.75 crore shares. The remaining Rs 150 crore will be raised via an offer for sale by existing shareholders.
Out of the fresh funds, Rs 380 crore will be used to reduce borrowings across the company and its subsidiaries.
Another portion is meant for expansion. Rs 60.50 crore has been placed for setting up a new hospital and upgrading current facilities. The company has also planned Rs 27.46 crore for medical equipment, while the rest is tagged for general corporate needs and any future acquisitions.
Park Medi World IPO: Anchor investors
A day before opening to the public, the company raised Rs 276 crore through its anchor book.
Park Medi World IPO: Grey market premium cools off
The IPO’s grey market premium has slipped from Rs 29 to Rs 20.5. Based on the latest GMP, the expected listing price sits near Rs 182.5, which would mean a premium of about 12.65% over the upper band.
It is however important to note that GMP is not an official indicator and fluctuates based on market sentiment
Park Medi World IPO: What brokerages are saying
Brokerage opinions have started trickling in, offering very different angles for investors to consider.
Anand Rathi Research highlighted the valuation at the upper band, noting, “At the upper price band, the company is valued at 32.8x FY25 P/E, implying a post-issue market capitalization of Rs 53,559 million.” The report said the company’s strategy includes expanding its hospital base and strengthening occupancy levels, adding, “Considering these factors, the IPO appears fairly valued and is rated ‘Subscribe – Long Term.’”
SBI Securities offered a more cautious view. It observed that Park Medi World has added 700 beds in the last two-and-a-half years and aims to increase capacity further by FY28. The brokerage said, “When compared to its closest competitors, the issue seems reasonably priced with a superior margin and return profile, however, growth has been weaker than competitors.”
It also flagged concerns around receivables, noting, “Additionally, the company has high debtor days (161 days as of FY25) which is largely attributable to the higher share of business derived from government schemes. We maintain a Neutral view on the company and would like to monitor its performance post listing.”