Medi Assist Healthcare has kicked off its initial public offering (IPO), allowing investors to subscribe until January 17. The IPO, valued at Rs 1,171 crore, solely comprises an offer for sale (OFS) of 2.8 crore shares. Notably, the company has already secured Rs 351 crore from anchor investors, including major players like Nomura, Goldman Sachs, Pinebridge Global, Troo Capital, and HSBC.
It’s crucial to understand that the funds raised through this IPO will go entirely to the selling shareholders, with no proceeds directed to the company itself.
Specializing in third-party administration services to insurance companies, Medi Assist Healthcare manages tasks such as health insurance claims processing, policy administration, customer service, and network management through its wholly-owned subsidiaries.
Market analysts recommend considering subscription due to the company’s strong position as a third-party administrator in a growing health insurance industry. However, caution is advised, taking into account identified risks and the relatively higher valuation.
Choice Broking, for instance, supports subscription, stating, “Medi Assist Healthcare Services is catering to the fast-growing health insurance sector. Thus, considering its dominant share in the TPA market, consistent financial performance, healthy cash flow generation and dividend payout, we assign a ‘SUBSCRIBE’ rating for the issue.”
The IPO’s price band is set at Rs 397 to Rs 418 per share, allowing investors to bid for shares in lots of 35. Qualified institutional buyers (QIBs) have a 50% reservation, while retail investors and non-institutional investors have 35% and 15% respectively.
As of now, the Grey Market Premium (GMP) for Medi Assist Healthcare in the unlisted market stands at Rs 30. The book running lead managers for the IPO include Axis Capital, IIFL Securities, Nuvama Wealth Management, and SBI Capital Markets.
Key Details:
IPO Size: 2.8 crore shares through Offer for Sale (OFS), raising Rs 351 crore from anchor investors.
Price Band: Rs 397 to Rs 418 per share, with lots of 35 shares.
Investor Reservation: 50% for QIBs, 35% for retail investors, and 15% for non-institutional investors.
Financial Snapshot (Sep 2023): 26% YoY rise in total income to Rs 312 crore, net profit declined by 39% to Rs 22.5 crore.
GMP: Rs 30 in the unlisted market, reflecting positive investor sentiment.