Hospital chain Jupiter Life Line Hospitals (JLHL) made a stellar stock market debut on Monday with its shares listing at Rs 973 on the NSE, a premium of 32 percent over the issue price of Rs 735 per share. The stock listed at Rs 960, 31 percent higher than its issue price.
Post-listing, the stock extended gains and moved 40 percent higher to Rs 1,028 over its issue price. The S&P BSE Sensex was down 0.16 percent at 67,730 at 10:02 AM.
The initial public offering (IPO) of the multi-specialty hospital chain received a strong response and subscribed 64.8 times, helped by massive demand from institutional buyers.
The portion for qualified institutional buyers (QIBs) received 181.89 times subscription, while the quota for non-institutional investors was subscribed 36 times and that of Retail Individual Investors (RIIs) was subscribed 8 times.
JLHL is a key multi-specialty tertiary and quaternary healthcare provider in the Mumbai Metropolitan Area (MMR) and western region of India. As of March 2023, it has a total capacity of 1,194 hospital beds across three hospitals that operate under the ‘Jupiter’ brand in Thane, Pune, and Indore with 1,306 doctors.
JLHL has mainly focused on middle and upper-middle-class households where it observes the working class segment with an organized sector that supports high possession of medical insurance.
JLHL has delivered healthy financials with 24.5 percent revenue growth and 34.6 percent EBITDA growth between FY20-23.
Overall EBITDA margin has also improved from 17.8 percent in FY20 to 22.6 percent in FY23. ROE and ROCE stood at healthy levels of 20.1 percent and 20.5 percent in FY23 which are mainly in line with the average performance of listed peers.
The company’s payor mix showcases that it has very low dependence on central and state government schemes for its revenues, with payments made through self-payers; insurance companies, third-party administrators, and corporations; and government schemes, accounting for 45.33 percent, 53.35 percent, and 1.32 percent, respectively, of its income from hospital services in Fiscal 2023.
SBI Securities, in an IPO note, had said that the issue looks fairly valued across various valuation parameters when compared with its peers. With decent return ratios and margins, the risk-reward ratio for long-term investors looks favorable, it was said.
