Yatharth Hospital & Trauma Care Services made its debut on August 7th, with a slight 2% premium instead of the predicted 20% surge prompted by market sentiment. Renowned for its exceptional super-specialty services in Delhi NCR, Yatharth’s IPO garnered significant demand and ended up being oversubscribed an impressive 36.16 times. Backed by strong financials and a well-thought-out debt reduction plan, the hospital chain aims to sustain its growth within India’s thriving healthcare industry.
Yatharth Hospital & Trauma Care Services marked its market debut on August 7 with a modest 2 percent premium over its issue price. This was a departure from the anticipated 20 percent premium, which was influenced by the subdued sentiment prevailing in the broader market.
Trading commenced on the Bombay Stock Exchange (BSE) at Rs 304 and on the National Stock Exchange (NSE) at Rs 306, surpassing the initial offering price of Rs 300. Analysts attributed the positive listing to Yatharth Hospital’s notable standing as a prominent provider of super specialty services in the Delhi NCR region, its diverse range of specialties, and its consistent operational and financial growth.
The hospital chain’s recent public offering garnered substantial attention, with an oversubscription rate of 36.16 times during the period from July 26 to 28. Qualified institutional investors displayed particularly strong interest, oversubscribing their allotted quota by an impressive 85.10 times. High-net-worth individuals and retail investors also displayed keen interest, oversubscribing their respective portions by 37.22 times and 8.34 times. The public offering encompassed a fresh issue of Rs 490 crore and a promoter’s offer for sale worth Rs 196.55 crore.
Headquartered in Noida, Yatharth Hospital operates a network of three super-specialty hospitals in the Delhi NCR region and an additional multi-specialty hospital in Madhya Pradesh, boasting a combined capacity of 1,405 beds.
The company’s financial performance demonstrated robust growth, with a Compound Annual Growth Rate (CAGR) of 51 percent in revenue during the period spanning FY21 to FY23. This growth was driven by increased patient volumes, higher bed occupancy rates, and a rise in average revenue per occupied bed. Over the same timeframe, the company’s Profit After Tax (PAT) margin expanded from 8.57 percent to 12.64 percent, while its Return on Equity (ROE) improved from 25.06 percent to 35.95 percent.
Yatharth Hospital’s current debt-to-equity ratio stands at 1.5x for FY23. Following the Initial Public Offering (IPO), a repayment of Rs 245 crore will significantly reduce this ratio to 0.03x. With an impressive Return on Equity (ROE) of 36 percent and Return on Capital Employed (ROCE) of 24.4 percent, analysts at Nirmal Bang considered Yatharth Hospital to be attractively valued at 20.9x FY23 EV/EBITDA compared to its industry peers.
Analysts noted that Yatharth Hospital is poised to benefit from a favorable tailwind, as CRISIL predicts a robust 11.3 percent Compound Annual Growth Rate (CAGR) in the Indian healthcare delivery industry between FY23 and FY27. This growth is attributed to long-term structural factors, increased affordability, and the potential impact of the Ayushman Bharat scheme. This scheme is expected to provide significant support to Yatharth Hospital’s growth trajectory, as highlighted by industry experts.
