IPO listed on 29 Feb'24
GPT Healthcare Ltd
Minimum Investment
₹ 14,880 / 80 shares
Grey market premium
₹ 0
Issue price
₹ 186
Listing price
₹ 215
Listing day %
8%
Listing on
Feb 29, 2024
Our Verdict:
Neutral
- GPT Healthcare operates in markets that are both densely populated and under-served, particularly in Eastern India where there is a notable scarcity of healthcare professionals. With only five doctors and 12.7 nurses per 10,000 people, this region has the lowest density of healthcare workers in the country. This positions GPT Healthcare advantageously to cater to the high demand for healthcare services in the area.
- In terms of valuation, the IPO seems fairly priced at a Price-to-Earnings (P/E) ratio of 38x, which is below the industry average, suggesting potential for a positive re-rating in the future.
- Nonetheless, GPT Healthcare is yet to successfully expand its footprint outside its home territory and needs to improve its bed occupancy rates further for better financial performance.
- Considering these factors, investors looking for immediate gains from the IPO might choose to subscribe, while long-term investors might prefer to observe the company's performance and reassess based on the improvement in financial metrics over time.
About the company
Founded in
17 Aug'89
Managing director
Dr. Om Tantia
- GPT Healthcare runs a network of mid-sized hospitals that offer full-service healthcare solutions, specializing in both secondary and tertiary care. It delivers an extensive array of medical services covering more than 35 specialties and super-specialties.
- As of September 30, 2023, the firm managed 4 multispecialty hospitals located in West Bengal and Tripura, providing a total of 561 beds. It is now looking to extend its network of hospitals to Eastern India.
STRENGTHS
- Diverse and Strong Operational Footprint: GPT Healthcare benefits from a diversified operational base across multiple specialties, with a large part of its revenue coming from private insurance and walk-in cash patients, reflecting a high demand for its services.
- Impressive Financial Growth: The firm has demonstrated outstanding financial performance, with a Compound Annual Growth Rate (CAGR) of 22% in Revenue from Operations between FY21 and FY23, alongside a commendable 21% growth in EBITDA.
- Robust Return Ratios: The firm enjoys healthy return ratios, with a Return on Equity (ROE) of 23.59% and a Return on Capital Employed (ROCE) of 26.09%.
- Improved Bed Occupancy Rates: There has been a significant improvement in bed occupancy rates at GPT Healthcare, increasing from 48% in FY21 to 58.92% in FY23, and further to 59.92% by September 2023.
RISK FACTORS
- Revenue Concentration Risk: A substantial portion, nearly 70%, of GPT Healthcare's revenue is sourced from three hospitals in West Bengal. Fluctuations in West Bengal's economic or political landscape could significantly impact the company's operations.
- Inconsistency in Earnings: The Net Profit rose from Rs 21.09 crore in FY21 to Rs 41.66 crore in FY22, before decreasing to Rs 39 crore in FY23. In a similar trend, the net profit margin grew from 8.48% in FY21 to 12.17% in FY22, then dropped to 10.64% in FY23.
- Concerns Related to the Promoter Group: Ishwari Prasad Tantia, a key figure in the Promoter Group, has been identified as a Wilful Defaulter by some financial entities. Furthermore, the company has previously encountered issues with regulatory compliance. Any negative rulings or fines from banks, the Reserve Bank of India (RBI), or the Securities and Exchange Board of India (SEBI) against any promoter or the company itself could affect its business operations.
- Comparative Lower Bed Occupancy Rates: GPT Healthcare’s bed occupancy rates fall short when compared to those of its peers in the market. Inability to sustain or improve these rates could hinder the company from realizing expected returns.
Issue details
Issue type
Mainstream
Issue size
₹ 525.14 crore
Fresh Issue
₹ 40 crore
OFS
₹ 485.14 crore
Price range
₹ 177 - 186
Lot size
80 shares
Issue Objective
The net proceeds from the issue are intended to be utilised towards:
- Repayment/ prepayment of certain outstanding borrowings availed by the company; and
- General corporate purposes
Dates
Bidding open
22 Feb'24
Bidding close
26 Feb'24
Allotment date
27 Feb'24
Refund date
28 Feb'24
Listing
29 Feb'24
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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