What you must know about Jupiter Life Line Hospitals IPO

Jupiter Life Line Hospitals Ltd was incorporated in the year 2007 as a multi-specialty tertiary and quaternary healthcare provider. It is quite strong in the MMRDA and Thane districts and is also present in Pune and Indore. It currently operates 3 hospitals under the "Jupiter" brand located at Thane (near Mumbai), Pune, and Indore. It has total operational bed capacity of 1,194 beds and it is currently in the process of developing a multi-specialty hospital in Dombivli, near Kalyan. The multi-specialty hospital at Dombivli will have 500 beds and has just commenced construction earlier this year. It also has over 1,300 doctors empanelled in its staff, which includes specialists, physicians, and surgeons across different medical faculties. The Jupiter Life Line Hospitals located at Thane and Indore are among the few to offer very advanced and sophisticated neuro-rehabilitation services. This is done through the use of dedicated robotic and computer-assisted neuro-rehabilitation techniques that are not easily available in India. All the hospitals are currently certified by the National Accreditation Board for Hospitals & Healthcare Providers (NABH) and are also accredited for medical testing by the NABL.

The company's offers inpatient and outpatient treatment across its major hospitals located at Thane, Pune, and Indore. Jupiter Life Line Hospitals is equipped with over 30 specialized treatments including bariatric surgery, dermatology, cardiology, gastroenterology, haematology, neurology, gynaecology, obstetrics, rheumatology, pain care, chest medicine, ENT, infectious diseases, oncology, mental health, orthopaedics, robotic knee replacement, dental care, endocrinology, internal medicine, nephrology, urology, and paediatrics. Over the years, Jupiter Life Line Hospitals Ltd has received various accolades and awards across various specializations. The hospital provides specialized care to patients, including after care as well as it offers specialized treatment facilities for international patients. The IPO of Jupiter Life Line Hospitals Ltd will be ICICI Securities Ltd, Nuvama Wealth Management Ltd and JM Financial Ltd. KFIN Technologies Ltd (formerly Karvy Computershare Ltd) will be the registrar to the issue.

Highlights of the IPO issue of Jupiter Life Line Hospitals Ltd

Here are some of the key highlights to the public issue of Jupiter Life Line Hospitals Ltd.

• Jupiter Life Line Hospitals Ltd has a face value of ₹10 per share while the price band for the book building IPO has been set in the band of ₹695 to ₹735. The final price will be discovered within this band through the process of book building.
   
• The IPO of Jupiter Life Line Hospitals Ltd will be a combination of a fresh issue and an offer for sale (OFS). The fresh issue portion comprises the issue of 73,74,163 shares (73.74 lakh shares approximately), which at the upper price band of ₹735 per share will translate into fresh issue size of ₹542 crore.
   
• The offer for sale (OFS) portion of the IPO comprises the issue of 44,50,000 shares (44.50 lakh shares), which at the upper price band of ₹735 per share will translate into an offer for sale (OFS) size of ₹327.08 crore. Out of the 44.50 lakh shares sold in the OFS, the promoter and promoter group are offering 21.50 lakh shares, while the balance 23 lakh shares are being offered by the non-promoter shareholders.
   
• Therefore, the overall IPO portion will comprise of the issue of 1,18,24,163 shares (1.18 crore shares approximately), which at the upper price band of ₹735 per share will translate into a total IPO issue size of ₹869.08 crore.

While the fresh issue will be capital and EPS dilutive, the offer for sale portion will only result in transfer of ownership. There will be 10 existing holders offering shares under the OFS portion. Two of them will be promoter shareholders who will jointly tender 21.50 lakh shares while the other 8 non-promoter shareholders will tender 23 lakh shares in total. The proceeds of the fresh issue portion will be used to repay / prepay outstanding loans availed by Jupiter Life Line Hospitals Ltd and its material subsidiary. A small part of the funds raised will also be used for general corporate purposes.

Promoter holdings and investor quota allocation quota

The company was promoted by Dr Ajay Thakker, Dr Ankit Thakker and Western Medical Solutions LLP. Currently the promoters hold 40.69% of the company, which will get diluted post the IPO. As per the terms of the offer, 50% of the net offer is reserved for the qualified institutional buyers (QIBs), while 35% of the total issue size is reserved for the retail investors. The residual 15% is kept aside for the HNI / NII investors . The stock of Jupiter Life Line Hospitals Ltd will be listed on the NSE and on the BSE. The table below captures the gist of the allocation to various categories.

Lot sizes for investing in the IPO of Jupiter Life Line Hospitals Ltd

Lot size is the minimum number of shares that the investor has to put in as part of the IPO application. The lot size only applies for the IPO and once it is listed then it can be even traded in multiples of 1 shares since it is a mainboard issue. Investors in the IPO can only invest in minimum lot size and in multiples thereof. In the case of Jupiter Life Line Hospitals Ltd, the minimum lot size is 20 shares with upper band indicative value of ₹14,700. The table below captures the minimum and maximum lots sizes applicable for different categories of investors in the IPO of Jupiter Life Line Hospitals Ltd.

It may be noted here that for the B-HNI category and for the QIB (qualified institutional buyer) category, there are no upper limits applicable.

Key dates for Jupiter Life Line Hospitals Ltd IPO and how to apply?

The issue opens for subscription on 06th September 2023 and closes for subscription on 08th September 2023 (both days inclusive). The basis of allotment will be finalized on 13th September 2023 and the refunds will be initiated on 14th September 2023. In addition, the demat credits are expected to happen on 15th September 2023 and the stock will list on 18th September 2023 on the NSE and the BSE. Jupiter Life Line Hospitals Ltd offers a very unique combination. It has an established and tested business model; it is into an industry that is considered the future of mass healthcare solutions to a population that is getting healthier, living longer, but also keen to avail medical facilities of global standards. Let us now turn to the practical issue of how to apply for the IPO of Jupiter Life Line Hospitals Ltd.

Investors can apply either through their existing trading account or the ASBA application can be directly logged through the internet banking account. This can only be done through the authorized list of self-certified syndicate banks (SCSB). In an ASBA application, the requisite amount is only blocked at the time of application and the necessary amount is debited only on allotment. Investors can apply in the retail quote (up to ₹2 lakh per application) or in the HNI / NII quota (above ₹2 lakh). Minimum lot sizes will be known after pricing.

Financial highlights of Jupiter Life Line Hospitals Ltd

The table below captures the key financials of Jupiter Life Line Hospitals Ltd for the last 3 completed financial years.

Data Source: Company RHP filed with SEBI (All ₹ figures are in crores)

There are few key takeaways from the financials of Jupiter Life Line Hospitals Ltd which can be enumerated as under

1. In the last 2 years, the revenues growth has been robust showing the potential that the organized healthcare sector has. It also shows that healthcare is moving rapidly from unorganized to organized space, and this one-stop shop concept is appealing even in smaller towns. Purely on the strength of the prospects of the sector and the pedigree of the group, the pricing does look like it has left something on the table for investors, since profit track is only available for the recent two years.
    
2. For the recent two years, the profit margins and the return on assets are at par with the best in the healthcare industry. This is an industry that entails lot of upfront costs, which get defrayed later. As a long term bet, here is a business that can grow in future with minimal capital consumption. However, this is a business where a lot of costs get front-ended and even competition is building up rapidly in this business.
    
3. The company has maintained an impressive rate of sweating assets as is evident from the asset turnover ratio. It has consistently averaged above 0.6X and is now moving towards 1X mark. That is a very good sign for a capital intensive business like hospital management. While the PE at 50 is reasonable for the industry, it is certainly an industry with huge potential ahead.

For now, the signals are good. Jupiter Life Line Hospitals has a good track record in offering comprehensive healthcare solutions and it is also a healthcare stock after a long time. The number of quality listed healthcare stocks is limited, so the demand supply gap should work in the favour of valuations.