Shalby Hospital Ltd’s IPO which opened for subscription this morning saw dull response and got subscribed by 20%, mainly backed by demand from institutional buyers. The Rs 540 crore issue saw total bids to the tune of 28,93,680 shares as against 1,45,21,686 shares on offer, implying a 20.5% subscription. QIBs bid for a total of 14,09,640 shares as against 41,65,267 shares reserved for them, implying subscription of 34%. Notably, retail investors bid for 14,63,700 shares implying subscription of 21%, as the total shares reserved for them stands at 71,64,793 shares. The issue also saw considerable demand from employees, as they bid for a total of 24% of the shares available to them. Non-institutional investor category saw the least demand, as they bid from a total of less than 1% of the shares reserved for them.
Shalby Hospitals’ estimated Rs 504.80 Crore will remain open till 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. The Ahmedabad-based multi-speciality hospital chain had on Monday raised Rs. 150.54 crore by allotting 60.7 lakh equity shares at ₹248 a share to anchor investors. Investors can bid for a minimum of 60 shares, and in lots of 60 shares thereafter.
Pointing to the strengths of the company, Axis Capital says that Shalby has an established presence and strong brand recall in Gujarat, and an emerging presence in western and central India. Further, the company incurs lower capital expenses by making optimal use of the available built-up area in their hospitals. Axis Capital also notes that the company is well guided, and continues to be led by a strong, highly qualified, experienced, and reliable management team.
“At the higher price band of Rs248, SHL’s share is available at a P/E multiple of 42.8(x) which is at a discount to its peer’s P/E(x) (Apollo Hospitals – 67.7x, Narayana Hrudayalaya – 90x and Healthcare Global – 118.4x). SHL is fundamentally strong and well managed company and at P/E (x) of 42.8 (considered post issue EPS), the issue is available at attractive valuation. Thus, we assign ‘subscribe’ rating to the issue,” Choice Broking said in its report.