Team-MoneyWorks4meGPT Healthcare Limited IPO Details:
Opening Date: February 22, 2024
Closing Date: February 26, 2024
Listing: BSE and NSE
Number of Shares: 28,233,323 shares
Face Value: Rs 10 per share
Price Band: Rs 177-186 per equity share
Issue Size: Rs 525.14 crore
Lead Managers: JM Financial
Recommendation: Fairly priced, subscribe for long-term gains
About the GPT Healthcare Ltd Company:
- GPT Healthcare (Govardhan Prasad Tantia) owns and operates 4 full-service multispecialty tertiary care hospitals in Eastern India, under the ILS Hospitals brand. With a total capacity of 561 beds offering a wide range of healthcare services across more than 35 specialties and super specialties, including but not limited to internal medicine, diabetology, nephrology with renal transplants, laparoscopic and general surgery, gynecology and obstetrics, critical care, and many more.
- The company’s hospitals are equipped with integrated diagnostic services and pharmacies, ensuring a comprehensive healthcare experience for patients. Focused on secondary and tertiary care, it targets the under-served healthcare market in Eastern India, leveraging its presence in three cities to cater to the region’s specific healthcare needs effectively.
- The journey of expansion and service excellence began with the establishment of its first hospital in Salt Lake, Kolkata, growing from an initial capacity of eight beds to 85 beds, including 17 beds across various ICUs and HDUs. Subsequent growth saw the establishment of hospitals in Agartala with 205 beds, Dum Dum, Kolkata with 155 beds, and Howrah with 116 beds, each contributing to the network’s extensive service offerings. Notably, the Dum Dum location is authorized for renal transplants, highlighting the network’s specialized healthcare capabilities.
- With a dedicated workforce of 1,855 employees, including 85 full-time consultants and 465 visiting consultants, the company is committed to delivering quality and affordable healthcare services, addressing the crucial needs of the communities it serves. This strategic focus on quality care, affordability, and regional insight positions the company as a key player in Eastern India’s healthcare landscape, with a clear vision for future growth and service excellence.
- The IPO is a combination of a fresh issue of equity shares aggregating to Rs 40 crore, and an Offer for Sale (OFS) of up to 2.6 crore equity shares by private equity firm BanyanTree Growth Capital II. Post listing the existing promoters (family members) will hold ~65% of the company.
Objects of issue
- The proposes is to utilize the Net Proceeds towards funding:
- Repayment of all or a portion of certain outstanding borrowings (~Rs. 42 Cr in FY23) availed by a company from banks and
- General corporate purposes
Positives
- Key regional corporate healthcare company with a strong foothold in under-penetrated and densely populated healthcare delivery markets
- Right-sized, full service and strategically located hospitals leading to high return on capital
- Well-diversified specialty mix and location mix
Future Plans: Strategic growth in adjacent markets with asset asset-light model
- In January 2023, a MoU was signed for establishing a 152-bed hospital in Raipur (Chhattisgarh) with an estimated capital outlay of Rs. 55 Cr. The Raipur hospital will operate on an asset-light model, where the investment in land and building construction is covered by the land’s owner and developer, in exchange for periodic rent payments. The company will focus its Capex on plant and machinery, along with necessary furniture and fixtures, ensuring a capital-efficient approach. Raipur hospital will be commissioned by FY25.
- Another expansion initiative involves a signed MoU and a long-term lease agreement for a 140-bed hospital in Ranchi (Jharkhand), projected to cost the company Rs. 50 Cr. Like the Raipur project, the Ranchi hospital will adopt an asset-light model. Operations at the Ranchi hospital are planned to start in FY27, aiming to significantly enhance the company’s capacity to provide healthcare services in Eastern India and boost its operational revenue.
Concerns
- Regional concentration risk – With all hospitals situated in India’s eastern region, any impact on revenue from these facilities or changes in regions economic conditions could materially affect business.
- Highly regulated industry necessitating the acquisition, renewal, and maintenance of statutory and regulatory permits, accreditations, and licenses.
Key management
- Dwarika Prasad Tantia serves as the Chairman and Whole-time Director, having been associated with the company since January 2005. A graduate from the University of Calcutta, he brings over 41 years of experience in the infrastructure and healthcare industries. As a founding member of ILS Hospitals, he is responsible for international business development, project execution, and new business ventures. Additionally, he holds the position of Honorary Consul of the Republic of Ghana in Kolkata.
- Om Tantia holds the position of MD, having been with the company since January 2005. As a founding member of ILS Hospitals, he also serves as the Medical Director and Head of the Department of Minimal Access and Bariatric Surgery in the Kolkata hospital. He earned his Bachelor of Medicine and Bachelor of Surgery from the University of North Bengal, and his Master of Surgery in general surgery from Sawai Man Singh Medical College, Jaipur. With over 40 years of experience, Dr. Tantia has conducted numerous laparoscopic procedures and has been recognized as a surgeon of excellence by the Surgical Review Corporation, USA.
- Anurag Tantia is the Whole-time Director of the company, having been associated with it since October 2011. He graduated with a Bachelor of Science in Management with honors from the University of Illinois. With over 12 years of experience in healthcare management, he is tasked with overseeing the day-to-day operations of the company.
- Kriti Tantia is the Chief Financial Officer, having joined the company in May 2011, and assumed the CFO role on March 15, 2016. She earned her bachelor’s degree in commerce from the University of Calcutta and is a certified member of the Institute of Chartered Accountants of India (ICAI), where she achieved an all-India rank of 38 in their examination.
Moneyworks4me Opinion
GPT Healthcare has multiple levers for growth (a) increasing occupancy and ARPOB (average revenue per operational bed) in existing hospitals (Agartala/Howrah occupancy is ~53/46% resp. in Q2FY24), (b) expansion projects in Raipur and Ranchi adopting an asset-light model, enhancing its service capacity and operational revenue. While medium-term margins will be under pressure when these hospitals are commissioned (EBITDA breakeven expected in 10-14 months), healthy cashflows from existing hospitals and a strong balance sheet will be value accretive.
Recommendation: Fairly priced, subscribe for long-term gains
Post-listing this will be a small-cap company, such companies have their risks, so be prudent in allocation.
| IPO Activity | Date |
| IPO Open Date | February 22, 2024 |
| IPO Close Date | February 26, 2024 |
| Basis of Allotment Date | February 27, 2024 |
| Refunds Initiation | February 28, 2024 |
| A credit of Shares to Demat Account | February 28, 2024 |
| IPO Listing Date | February 29, 2024 |
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Minimum | 1 | 80 | ₹ 14,880 |
| Maximum | 13 | 1040 | ₹ 193,440 |
When will the GPT Healthcare Ltd IPO open?
GPT Healthcare IPO will open for subscription on Thursday, 22nd February 2024, and closes on Monday, 26th February 2024.
What is the price band of GPT Healthcare Ltd IPO?
The price band for GPT Healthcare Ltd IPO is Rs. 177-186/share.
What is the lot size for the GPT Healthcare Ltd IPO?
Retail investors can subscribe to the IPO minimum lot size is 80 shares, up to a maximum of 13 lots i.e. Rs. 1,93,440/-.
What is the issue size of GPT Healthcare Ltd IPO?
The total issue size is ~ Rs. 525.14Cr.
When will the basis of allotment be out?
Allotment will be finalized on February 27th and refunds will be initiated by February 28th. Shares allotment will be credited in Demat accounts by February 28th.
What is the listing date of GPT Healthcare Ltd’s IPO?
The tentative listing date of the GPT Healthcare IPO is February 29th, 2024.
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Yog Rajani
Roshan Pande
