Jupiter Life Line Hospitals likely to list with 30% premium tomorrow
Experts are anticipating a robust listing for Jupiter Life Line Hospitals, a healthcare service provider, with a projected premium of around 30 percent over its issue price of Rs 735 per share when it debuts on September 18. This optimism is underpinned by several key factors.
First and foremost, the IPO garnered substantial attention during its subscription period from September 6 to 8, with a remarkable oversubscription rate of 63.72 times. Notably, qualified institutional buyers displayed significant interest, subscribing at a rate of 187.32 times their allotted quota. This strong subscription rate indicates high demand among institutional investors, a promising sign for a premium listing.
Furthermore, Jupiter Life Line Hospitals enjoys a robust brand presence and recall within the Mumbai Metropolitan Region (MMR), bolstering investor confidence. The MMR region is a key market for the company, and its strong brand recognition there is expected to attract investors seeking exposure to the healthcare sector.
Additionally, the overall bullish sentiment in the equity markets has played a role in the optimistic outlook for Jupiter Life Line Hospitals. Both the BSE Sensex and the Nifty50 have recorded substantial gains, approaching historic highs, with a nearly 5 percent increase this month. This positive market sentiment is likely to contribute to a favorable listing for the healthcare service provider.
In summary, the combination of strong subscription numbers, a well-established brand in the MMR region, increasing demand in the healthcare sector, and a bullish equity market has created a positive outlook for Jupiter Life Line Hospitals’ listing, with expectations of a significant premium over the issue price.
Jupiter Life Line Hospitals currently operates three hospitals in the Mumbai Metropolitan Area (MMR) and the western region of India, boasting a combined bed capacity of 1,194 beds as of March 2023. These hospitals are equipped to offer a wide range of medical specialties, providing tertiary and quaternary healthcare services to patients in the region.
In an effort to expand its healthcare services and infrastructure further, the company has embarked on the construction of its fourth multi-specialty hospital in Dombivli, Maharashtra. This upcoming facility is anticipated to have a substantial capacity of over 500 beds, significantly augmenting Jupiter Life Line Hospitals’ ability to serve the healthcare needs of the community.
The strong response to the Jupiter Life Line Hospitals’ initial public offering (IPO) has generated optimism among experts. Prathamesh Masdekar, a research analyst at StoxBox, expressed confidence in the IPO’s listing, predicting that it could open with a premium of approximately 30 percent over the issue price of Rs 735 per share. Masdekar highlighted the company’s robust brand recall in the MMR region and its focus on delivering advanced healthcare services as factors that make it an attractive investment from a medium-to-long-term perspective.
Overall, Jupiter Life Line Hospitals’ expansion plans and positive market sentiment suggest a promising trajectory for the company in the healthcare sector.
Jupiter Life Line Hospitals has demonstrated a consistent improvement in its financial performance, which is expected to receive a further boost through the retirement of debt using the proceeds from its initial public offering (IPO). This financial maneuver is viewed positively by experts like Prathamesh Masdekar, as it can enhance the company’s financial health and potentially drive future growth.
The Mumbai-based company plans to utilize the net fresh issue proceeds primarily for repaying debt amounting to Rs 510.4 crore. The remaining funds will be allocated for general corporate purposes. As of March FY23, Jupiter Life Line Hospitals had total borrowings of Rs 476.4 crore. By retiring this debt, the company can reduce its interest obligations and strengthen its balance sheet.
The market capitalization of the company is currently estimated at Rs 4,819 crore based on the upper price band of Rs 735 per share. This valuation reflects the market’s perception of the company’s potential and the positive outlook for its future growth and financial performance.
Jupiter Life Line Hospitals, spearheaded by its promoters Ajay Thakker, Ankit Thakker, and Western Medical Solutions LLP, has posted impressive financial performance for the fiscal year FY23. Notably, the company recorded a robust profit of Rs 72.9 crore for FY23, marking a substantial growth of 42.6 percent over the previous year. This profit surge was bolstered by a significant increase in revenue from operations, which amounted to Rs 892.5 crore, showcasing a noteworthy year-on-year rise of 21.7 percent.
Additionally, the company’s EBITDA (earnings before interest, tax, depreciation, and amortization) registered a remarkable 31.2 percent increase, reaching Rs 201.3 crore, highlighting the company’s operational efficiency and enhanced profitability. Importantly, the EBITDA margin expanded by 163 basis points to 22.55 percent, indicating improved cost management and a positive outlook for the company’s financial health.
In the grey market, an unofficial platform where IPO shares can be traded before their official listing, Jupiter Hospital shares were reportedly available at a premium of more than 30 percent. Industry analysts believe this premium reflects the strong investor interest and confidence in the company’s prospects.
Prashanth Tapse, a research analyst and senior vice-president for research at Mehta Equities, expressed optimism about the company’s listing, anticipating a listing gain of 25-30 percent. He attributes this positive outlook to the high demand within the healthcare sector, the company’s expansion plans in the western regions, and the appeal of a branded chain of hospitals.
Jupiter Life Line Hospitals’ initial public offering (IPO) consisted of a fresh issue of shares worth Rs 542 crore and an offer-for-sale (OFS) of shares worth Rs 327.08 crore by selling shareholders. The IPO had a price band of Rs 695-735 per share, further contributing to its successful response from investors across various categories.
