GPT Healthcare IPO – Should You Invest?

GPT Healthcare Limited, a leading healthcare provider in Eastern India, is all set to launch its Initial Public Offering (IPO) from February 22, 2024, to February 26, 2024. The company’s IPO is a book-built issue consisting of a fresh issue of Rs 40.00 crore and an offer for sale of 2.61 crore shares. Let’s get into the details of GPT Healthcare’s IPO, its financials, objectives, positive aspects, and risks associated with investing in the company.

About GPT Healthcare Limited

Established in 1989, GPT Healthcare operates a chain of mid-sized, multi-specialty hospitals under the ILS Hospitals brand, offering integrated healthcare services focusing on secondary and tertiary care. With hospitals in Kolkata, Agartala, and Howrah, the company provides a comprehensive range of healthcare services across 35 specialties and super-specialties.

GPT Healthcare IPO – Issue Details

IPO Opening Date 22-Feb-24
IPO Closing Date 26-Feb-24
IPO Listing Date 29-Feb-24
Issue Type Book Built Issue IPO
Face Value Rs 10 per equity share
IPO Price band Rs 177 to Rs 186 per equity share
Lot Size 80 Shares
Listing at BSE and NSE
Total Issue Size Rs. 525.14 Crores
    Fresh issue     Rs. 40 Crores
    OFS     Rs. 485.14 Crores

GPT Healthcare Limited – Financial Summary

GPT Healthcare’s revenue saw a modest increase of 7.11% between March 2022 and March 2023, while its profit after tax (PAT) witnessed a slight drop of -6.37% during the same period. The company’s key performance indicators like Return on Equity (ROE), Return on Capital Employed (ROCE), Debt/Equity ratio, and Return on Net Worth (RoNW) reflect healthy financial metrics. Here are the financials of the company.

Financial Year ending / Period ending (Amt in Crores)
Period Ended 31-Mar-21 31-Mar-22 31-Mar-23 30-Sep-23
Assets 317.21 323.22 326.76 332.09
Revenue 248.86 342.40 366.73 206.70
Profit After Tax 21.09 41.66 39.01 23.49
Net Worth 132.68 156.96 164.14 171.43
Reserves and Surplus 75.96 78.28 85.46 92.75
Total Borrowing 122.93 95.52 64.67 55.57

GPT Healthcare IPO Objectives

The IPO issue contains both OFS and Fresh issue. Under OFS the amount goes to selling share holders and company would not get any thing.

The fresh issue from the IPO will primarily go towards the repayment or prepayment of outstanding borrowings and general corporate purposes.

GPT Healthcare IPO  – Positive Aspects of Investing

  • Regional Dominance: GPT Healthcare is a key player in Eastern India, serving regions with under-penetrated healthcare services.
  • Diverse Healthcare Services: With a broad spectrum of healthcare offerings across various specialties, the company enjoys a diversified revenue stream.
  • Accreditations and Certifications: Accreditation by reputed agencies underscores the quality of healthcare services provided by GPT Healthcare.
  • Stable Financial Indicators: Despite marginal fluctuations in revenue and profit, the company maintains healthy financial ratios, indicating operational stability.

GPT Healthcare IPO Risk Factors

  • Competition: GPT Healthcare faces competition from listed industry peers, which could impact its market share and profitability.
  • Regulatory Environment: The healthcare sector is subject to regulatory changes and compliance requirements, posing potential risks to operations.
  • Dependency on Borrowings: The company’s reliance on borrowings exposes it to interest rate risks and financial leverage.

GPT Healthcare IPO Price Valuation

  • The IPO price band is Rs 177 to 186 per share
  • If we consider last 3 years weighted EPS of Rs 4.62, the P/E ratio works out to be 40x
  • If we consider the last year FY23 EPS of Rs 4.88, the P/E ratio works out to be 38x
  • If we annualise 6 months ended Sep-23 EPS, the P/E ratio works out to be 32x
  • The listed peers like Global Health Limited trading at P/E 90x (Highest) and Kovai Medical Center & Hospital Limited is trading at P/E of 30x (Lowest) and industry average P/E is 56x.
  • Hence, the IPO Price band at P/E of 38x to 40x is fully priced.

GPT Healthcare IPO – Conclusion and Review

  • In conclusion, GPT Healthcare Limited presents itself as a promising investment opportunity, backed by its strong regional presence, diversified healthcare offerings, and stable financial performance.
  • However, investors should carefully weigh the positive aspects against the inherent risks associated with the healthcare sector and IPO investments.

High risk investors can invest in such IPO after going through all the risk factors indicated in the GPT Healthcare IPO RHP.

Suresh KP

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