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Global Health Limited IPO

Medanta-IPO

Introduction

Global Health was founded by Dr. Naresh Trehan, a world-renowned cardiovascular and cardiothoracic surgeon. It is one of the largest private multi-speciality tertiary care providers operating in the North and East regions of India, with key specialties of cardiology and cardiac science, neurosciences, oncology, digestive and hepatobiliary sciences, orthopaedics, liver transplant, and kidney and urology, according to CRISIL Report. Under the “Medanta” brand, they have a network of five hospitals currently in operation (Gurugram, Indore, Ranchi, Lucknow and Patna) and one hospital in Noida, which is under construction. They operate six multispeciality clinics at DLF Cybercity Gurugram, Delhi Airport, south Delhi, Darbhanga, Patna and Subhash Chowk Gurugram. As at June 30, 2022, they provide healthcare services in over 30 medical specialties and engage over 1,300 doctors led by experienced department heads and, spanning an area of 4.7 million sq. ft., with operational hospitals have 2,467 installed beds. Medanta Gurgaon is the only private hospital in India to feature in Newsweek’s list of the top 200 global hospitals in 2021 and was featured in the list of top 250 global hospitals in 2022 by Newsweek.

IPO SnapShot – GLOBAL HEALTH LIMITED
Issue Open Date 03-Nov-22
Issue Closing Date 07-Nov-22
Basis of Allotment 11-Nov-22
Bid Lot 44
Price Band Rs. 319 – 336
Issue Size (Shares) 4,67,42,397
Face Value 2
QIB Shares Offered Not more than 50% of the Offer
NII (HNI) Shares Offered Not less than 15% of the Offer
Retail Shares Offered Not less than 35% of the Offe
Objects of the issue
To repay/prepay the borrowings of its subsidiaries
To carry out the Offer for Sale
Promoters
Dr. Naresh Trehan 35.00%

 

Rationale

Global Health Rs 2,205.57 Cr IPO consists of a fresh issue of Rs 500cr for investment in two of their subsidiaries, GHPPL and MHPL, for repayment/prepayment of borrowings, in full or part, of such Subsidiaries and General corporate purposes and an OFS of Rs 1,705.57 Cr. India is expected to have more than 1.4 billion people by 2026, stressing the need for increased number of hospital bed capacity. Acc to CRISIL Report India’s bed density (bed count per 10,000 population) of 15 beds not only falls far behind the global median of 29 beds (for 2017) but also lags behind other developing countries such as Brazil (21 beds for 2017) and Malaysia (19 beds for 2017). With the emergence of Covid this need has been accentuated. To serve Indian and international patients, Medanta have gradually grown number of beds to 2,467 installed beds as at June 30, 2022.

Operational beds at Gurugram, Indore and Ranchi hospitals were 1,377, 1,284, 1,431, 1,412 and 1,430 as at March 31, 2020, 2021 and 2022, and June 30, 2021 and 2022, respectively. The average occupancy level of beds at our hospitals dropped in Fiscal 2021 to 51.57% but there was a gradual recovery in volumes in Fiscal 2022 with our average occupancy level of beds at hospitals increasing to 60.50% in Fiscal 2022 despite of India experiencing a severe second wave of Covid-19 in the first quarter of Fiscal 2022. Average revenue per occupied bed of our mature hospitals was Rs 50,302.80, Rs 47,682.69, Rs 54,272.99, Rs 49,376.30 and Rs 59,291.14 in Fiscals 2020, 2021 and 2022 and the three months ended June 30, 2021 and 2022. Patient volume in Fiscals 2020, 2021 and 2022 and the 3 months ended June 30, 2021 and 2022 was 1,389,460, 1,178,230, 2,073,619, 440,766 and 590,476.

They have recently incorporated a wholly-owned subsidiary of their Company, GHL Pharma & Diagnostic Private Limited through which they aim to run all of out-patient pharmacies in hospitals and clinics as well as explore opportunities for expanding ‘out-of-hospital’ laboratory diagnostic services. Total income contribution by Gurugram, Indore and Ranchi hospitals to consolidated total income was 98.15%, 84.95%, 81.60%, 84.22% and 76.70%, and EBITDA margin was 16.97%, 15.67%, 22.81%, 21.92% and 22.62% in Fiscals 2020, 2021 and 2022, and the three months ended June 30, 2021 and 2022. Their primary source of revenue is from IPD admission, which amounted to Rs 11,941.20 million, Rs 11,865.36 million, Rs 17,405.99 million, Rs 4,032.04 million and Rs 4,923.44 million accounting for 80.65%, 83.69%, 82.87%, 85.21% and 82.60% of our income from healthcare services in Fiscals 2020, 2021 and 2022, and the three months ended June 30, 2021 and 2022, respectively.

They have a under construction hospital in Noida, which is intended to commence operation during Fiscal 2025 with an expected installed capacity of 300 beds. Upon operation of our Noida hospital in Fiscal 2025, they expect the number of total installed beds to exceed 3,500 at the end of Fiscal 2025. Going forward, they intend to continue to invest in bed capacity expansion in existing facilities and develop further super-specialities, employ new technology and focus on preventive healthcare.

 

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