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Global Health IPO Review: Global Health Limited is coming up with its Initial Public Offering. The IPO will open for subscription on November 3rd, 2022, and close on November 7th, 2022. It is looking to raise Rs 2,205.57 Crores, out of which Rs 500 crores will be a fresh issue and the remaining Rs 1,705.57 Crores will be an offer for sale.

In this article, we will look at the Global Health IPO Review 2022 and analyze its strengths and weaknesses. Keep reading to find out!

Global Health IPO Review – About The Company

Global Health Limited opened its first hospital in Gurugram in the year 2009. Currently, it is one of the largest private multi-specialty tertiary care providers operating in the North and East regions of India in terms of bed capacity and operating revenues as of March 2022.

The company operates under the brand “Medanta” which specializes in cardiology and cardiac science, neurosciences, oncology, digestive and hepatobiliary sciences, orthopedics, liver transplant, and kidney and urology.

Global Health Limited IPO Review - Assets

As of June 30, 2022, the company provides healthcare services in over 30 medical specialties and engages over 1,300 doctors led by experienced department heads, spanning an area of 4.7 million sq. ft., our operational hospitals have 2,467 installed beds.

In addition to that, the company also operates six multispeciality clinics at DLF Cybercity Gurugram, Delhi Airport, south Delhi, Darbhanga, Patna, and Subhash Chowk Gurugram.

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The key focus areas of the company

  • The Medanta Heart Institute
  • The Medanta Institute of Neurosciences 
  • The Cancer Institute
  • The Institute of Digestive and Hepatobiliary Sciences
  • Medanta Institute of Kidney and Urology
  • Institute of Musculoskeletal Disorders and Orthopaedics
  • The Medanta Institute of Liver Transplantation and Regenerative Medicine
  •  Internal Medicine Division at Medanta

The competitors of the company

Global Health Limited IPO Review - Competitors

(Source: DRHP of the company)

Global Health IPO Review – Financial Highlights

Global Health Limited IPO Review - Financials

(Source: DRHP of the company)

Global Health IPO Review – Industry Overview

The healthcare budget has increased year-over-year, with a budget for the Ministry of Health and Family Welfare(MoHFW) clocking an 11% CAGR between fiscal 2011 and fiscal 2023. 

In addition to that, the government of India has taken additional measures to improve the healthcare segment. An open platform for National Digital Health Ecosystem to be rolled out. 

Government expenditure on healthcare has remained range bound at 20-30% of the current healthcare expenditure from 2010 to 2016. However, moving forward,  the Government aims to increase public healthcare expenditure to 2.5%- 3.0% of GDP by 2025 from the current 2%, according to the National Health Policy. 

Further, CRISIL Research estimates the Indian healthcare delivery market to reach approximately Rs 5.5 – 5.7 trillion in value, terms by end of fiscal 2023, with growth being contributed by stabilization of regular treatments, surgeries, and OPD, amid minimization of disruption due to the pandemic and expansion of Average revenue per occupied bed (“ARPOB”) for the sector.

Strengths

  • The company is a Tertiary and quaternary care provider in India, that is recognized for its clinical expertise in particular in dealing with complicated cases.
  • The company has established multiple institutions to focus on Clinical Research and Academics.
  • The company has large-scale hospital chains with sophisticated infrastructure, medical equipment, and technology.
  • The company has focused on under-served areas with dense populations and is also looking to diversify into new service areas such as digital health
  • The company is a ‘Doctor-led’ hospital that is driven by skilled and experienced doctors in the healthcare space.

Weaknesses

  • The company is heavily dependent on a few hospitals that generate a significant portion of its revenue. Any changes in that will lead to a decline.
  • The business is highly dependent on the availability of medical professionals. Any changes in the retention rate might affect the business.
  • The company is subject to incurring heavy costs such as manpower cost, infrastructure maintenance & repair cost, and high medical equipment cost. The inability to recover these costs can lead to a decline in profits.
  • The company is subject to stringent laws and regulations and is expected to meet healthcare quality standards. Nonadherence to them can affect the reputation of the business.
  • The company has certain outstanding litigation against them, their directors, Subsidiaries, and Promoter.

Global Health IPO Review – GMP

The shares of Global Health traded at a premium of 4.46% in the grey market on November 3rd, 2022. The shares tarded at Rs 351. This gives it a premium of Rs 15 per share over the cap price of Rs 336. 

Global Health IPO Review – Key IPO Information

Promoters: Dr. Naresh Trehan

Book Running Lead Managers: Credit Suisse Securities (India) Private Limited, Jefferies India Private Limited, JM Financial Limited, and Kotak Mahindra Capital Company Limited.

Registrar To The Offer: KFin Technologies Limited

ParticularsDetails
IPO Size₹2,205.57 Crore
Fresh Issue₹500 Crore
Offer for Sale (OFS)₹1,705.57 Crore
Opening dateNovember 3, 2022
Closing dateNovember 7, 2022
Face Value₹2 per share
Price Band₹319 to ₹336 per share
Lot Size44 Shares
Minimum Lot Size1 (44 Shares)
Maximum Lot Size13 (572 Shares)
Listing DateNovember 16, 2022

The Objective of the Issue

The Net Proceeds from the Fresh Issue are proposed to be utilized for:

  • Investment in two of their Subsidiaries, GHPPL and MHPL, in the form of debt or equity for repayment/prepayment of borrowings, in full or part, of such Subsidiaries.
  • General corporate purposes

In Closing

In this article, we looked at the details of Global Health Limited IPO Review 2022. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for investors to look into the company and analyze its strengths and weaknesses. That’s it for this post.

Are you applying for the IPO? Let us know in the comments below.

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