New issue: Shalby Hospitals Rs 500 crore IPO to open tomorrow; watch out for these risks before you buy

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Updated: December 4, 2017 3:54:52 PM

Proceeds of Shalby IPO will be utilised towards repayment of borrowings availed by the company besides purchasing medical equipment for existing, recently set-up as well as upcoming hospitals.

initial public offering, New India Assurance, qualified institutional buyers, IPO fully subscribed, Retail investorsShalby Hospitals’ estimated Rs 504.80 Crore initial public offer (IPO) has opened today for subscription. (Image: Reuters)

Shalby Hospitals’ estimated Rs 504.80 Crore initial public offer (IPO) is opening tomorrow for subscription. The issue is closing on December 7. The leading multi-speciality chain of hospitals in India has fixed a price band of Rs 245 – 248 per equity share. The company expects to raise Rs 480 crore from a fresh issue of equity shares, while its promoter Vikaram Shah has put an offer for sale upto 1,000,000 equity shares.

Proceeds of the IPO will be utilised towards repayment of borrowings availed by the company besides purchasing medical equipment for existing, recently set-up as well as upcoming hospitals, the company said. “We aim to be one of the leading healthcare service providers in India by expanding the network of hospitals owned and operated through greenfield and brownfield projects, strategic acquisitions and operation and management (O&M) arrangements,” Shalby chairman and managing Vikram Shah said.

Having performed approximately 50,175 joint replacements since 2007, Shalby has been a market leader in the area of joint replacement surgeries, says Axis Capital, adding that it has an integrated and scalable business model enabling them to provide comprehensive healthcare solutions through a network of multi-speciality hospitals.

Strengths: 

  • Shalby has an established presence and strong brand recall in Gujarat, and an emerging presence in western and
    central India.
  • Shalby incurs lower capital expenses by making optimal use of the available built-up area in their hospitals.
  • The company is well guided, and continues to be led by a strong, highly qualified, experienced, and reliable
    management team.
  • The company has entered into a revenue-sharing arrangement with the Mumbai-based Asha Parekh Hospital to construct 175 bed new hospital at a cost of Rs 120 crore.

Weakness:

The company is establishing two new hospitals at Nasik in Maharashtra and Vadodara in Gujarat. As part of expansion plans, the company also plans to expand its hospital network to northern India, eastern India, and northeastern part of the country. Expanding to these new cities may lead to lower revenue per bed.

Company profile:

Incorporated on August 30, 2004, Shalby Limited is one of the leading Multi-Specialty Chain of Hospitals in India Led by Dr Vikram Shah, an Orthopaedic Surgeon with more than 25 years of professional experience. Their 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. Headquartered in Ahmedabad, Shalby has a domestic and overseas outreach through a network of hospitals in India, and Outpatient Clinics and Shalby Arthroplasty Centre of Excellence (“SACE”) located in India, Africa, and the Middle East.

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