Ahmedabad-headquartered Shalby Multi-Specialty Hospital is planning to raise around Rs 505 crore from its initial public offering (IPO). The company has set a price band of Rs 245 to Rs 248 per share for its IPO and when calculated at the upper band of the issue price the company will be valued at about Rs 2,678 crore. The IPO is scheduled to open on December 5 and close on December 7. Bids can be made for a minimum of 60 equity shares and multiples of 60 thereof. The issue consists of a fresh issue of shares for up to Rs 480 crore and an offer for sale (OFS) of Rs 24.8 crore by Vikram Shah, chairman and managing director of Shalby Hospital.
The company proposes to utilise the net proceeds of the fresh issue towards scheduled repayment of debt worth Rs 320 crore and for general corporate purposes. The equity shares of Shalby Hospital are proposed to be listed on the National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE). Edelweiss Financial Services, IIFL Holdings and IDFC Bank are the book running lead managers to the issue. Shalby Hospital has a network of 11 operational hospitals with an aggregate bed capacity of 2,012. It also overseas presence through clinics in Africa and the Middle East.
The company offers healthcare services in areas of specialisation such as orthopaedics, cardiology, neurology, oncology and renal transplants. As of June 2017, Shalby Hospital employed 2,049 employees and engaged 319 medical professionals–consisting of 294 doctors who are full-time consultants and 25 doctors who are part-time consultants.
Shably’s net revenue in financial year 2017 was Rs 325.38 crore against Rs 290.4 crore during the same period in the previous financial year. Yes Securities CEO, E Prasanth Prabhakaran said that healthcare is a growing and evergreen market. Shalby also boasts better EBIDTA margins than its peer hospitals at 22%, vis-a-vis between 10% to 13% for Apollo Hospitals, Fortis Healthcare and Narayana Hrudayalaya. However, at over 30, the earnings multiple isn’t really cheap. That said, the lead managers are confident of the investor appetite.