Krishna Institute of Medical Sciences (KIMS) IPO – Review and Analysis
KIMS IPO – Dates, Issue Size, Price Band, Risk Factors, Valuations and Review
Hyderabad based Krishna Institute of Medical Science’s IPO (aka KIMS IPO) would open for subscription on 16th June 2021. KIMS is one of the largest healthcare providers in both Telangana and Andhra Pradesh states. Company generated strong revenue growth in the last 3 years. It turned into profit making company from 2019 onwards. Should you invest in KIMS IPO? In this article we would provide KIMS IPO dates, IPO Price band, market lot, reasons to invest, risk factors, IPO Price valuations and final review whether one should invest or avoid.
About KIMS Limited
Krishna Institute of Medical Sciences Limited (KIMS) is incorporated in 1973. It is one of the largest healthcare service providers in Andhra Pradesh and Telangana states. It provides multi-disciplinary healthcare services with a key focus on primary, secondary, & tertiary care in tier 2-3 cities. Company majorly offers healthcare services in the areas of oncology, cardiac, neurosciences, gastric sciences, orthopedics, renal sciences, organ transplantation etc.,
KIMS Limited competitive strengths
1) KIMS is one of the largest corporate healthcare service providers in Andhra Pradesh and Telangana states.
2) It has highly qualified and trained doctors and medical support staff.
3) Company has strong operational and financial performance.
4) KIMS has experienced managerial team.
KIMS IPO Dates, Price Band and Issue Details
KIMS IPO would open for subscription on Wednesday 16th June 2021 and closes on Friday 18th June 2021.
|IPO Opening Date||16-Jun-21|
|IPO Closing Date||18-Jun-21|
|Issue Type||Book Built Issue IPO|
|Face Value||Rs 10 per equity share|
|IPO Price band||Rs 815 to Rs 825 per equity share|
|Lot Size||18 Shares|
|Min Order Quantity||18 Shares|
|Listing at||BSE and NSE|
|Issue Size||Rs 2,143.74 Crores
i) OFS – Rs 1,943.74 Crores
2) Fresh issue – Rs 200 Crores
Objects of the issue
Here are the objects of the IPO issue.
1) Offer for Sale for Rs 1,943.74 Crores: Under OFS, selling shareholders would sell the shares and the company would not get any proceeds from this offer.
2) Fresh Issue for Rs 200 Crores:
i) To make repayment / pre-payment of borrowings availed by the firm and subsidiaries i.e., KHKPL, SIMSPL and KHEPL.
ii) General corporate purposes.
Who are the company promoters?
Dr. Bhaskara Rao Bollineni, Rajyasri Bollineni, Dr. Abhinay Bollineni, Adwik Bollineni, and Bollineni Ramanaiah Memorial Hospitals Private Limited are the company promoters.
Company Financial Performance
Here are the restated consolidated revenue and profit details in the last 3 years.
|Period ending||Total Revenues (Rs in Mns)||Profits after tax
(Rs in Mns)
Its EPS for FY2021 is Rs 26.42 and last 3 years average EPS is Rs 17.35.
Why to invest in KIMS Limited IPO?
Here are a few reasons to invest.
1) KIMS is the leading healthcare service provider in Telangana and Andhra Pradesh States.
2) Company generated strong revenue growth in the last 3 years.
3) Company turned from losing making in FY2019 to profit making in 2020. Its margins have improved significantly for 2021. For FY2021, some extent this can be attributable due to covid
Risk Factors of investing in this IPO
1) Company is highly dependent on its healthcare professionals including doctors with whom they engage on consultancy basis. If company is unable to attract and retain such health care professionals, it can impact company’s business.
2) Covid 19 pandemic has affected company regular business operations and it can continue in future too.
3) Company major revenues are from hospitals in Hyderabad (Telangana) region. Any effect on location hospitals for various reasons can affect company financials.
4) Company is generating significant revenue through certain specialties. These could be volatile and can affect company business.
5) KIMS has ceased operations at some of the locations in the past and may continue in future too which can impact company financial performance.
6) KIMS has taken hospital building in Kondapur, Hyderabad which does not possess the requisite occupancy certificate from the relevant municipal authority and NOC from Fire department in Telangana State. This can pose risk to company business in future.
7) Company business is highly regulated industry. They need to comply and apply safety, health and environmental etc., regulations. Any violations can affect its business in future.
8) Company has intense competition from Apollo Hospitals, Yashoda Hospitals, Asian Institute of Gastroenterology etc. If they are unable to compete effectively, its business, results of operations can adversely affect.
9) For complete internal and external risk factors, you can refer the RHP of the company
KIMS IPO Dates / Timetable / IPO Schedule
|Finalization of Allotment||23-Jun-21|
|Initiation of Refunds||24-Jun-21|
|Credit to Demat Account||25-Jun-21|
|IPO Shares Listing Date||28-Jun-21|
KIMS IPO Price Valuations
This section helps you know how the issue is priced i.e., overpriced or underpriced.
KIMS IPO Issue Price band is Rs 815 to Rs 825.
1) On the upper price band of Rs 825 and EPS of Rs 26.42 for FY21, the P/E ratio works out to be 31x.
2) For the last 3 years average EPS of Rs 17.35, the P/E ratio is 47x.
3) Means, the company asking price of Rs 825 of the upper price band in the P/E range of 31x to 47x.
5) There are listed peers like Apollo Hospitals where it is trading at P/E 100x, and all other hospitals have negative EPS (due to losses) and not comparable.
Hence, KIMS Share Price of Rs 825 (upper price band) is reasonably priced.
Should you invest in KIMS IPO?
Krishna Institute of Medical Sciences (KIMS) Ltd is a leading healthcare service provider in Telangana and Andhra Pradesh States.
Company generated strong revenue growth in the last 3 years.
Company was generating loss in 2018 and moved to profits from 2020 onwards. It generated high margins for FY2021. One can attribute such high margin growth could be due to covid-19.
KIMS IPO share price is reasonably priced.
Considering all these positive factors, one can invest in this IPO for short term to long term perspective.
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