IPO closes on 12 Dec'25
Nephrocare Health Services Ltd
Minimum Investment
₹ 14,720 / 32 shares
Our Verdict:
Neutral
- Nephrocare Health Services Ltd (NHSL) has consistently shown growth in both its revenue and profits over the last three fiscal years, supported by steady margin expansion.
- However, in terms of valuations, the IPO appears fully priced with a P/E multiple of 55x. When factoring in the latest financials (H1FY26), the valuation seems stretched. Despite strong performance in FY25, higher finance costs have impacted H1FY26 earnings, warranting caution.
- While the long-term outlook remains promising, backed by the company's market leadership, expanding international presence and increasing penetration in India, the current valuation offers limited potential for short-term gains.
- The dialysis sector's structural growth drivers remain robust, but the key consideration will be NHSL's ability to execute its expansion strategy effectively while maintaining margins, returns and cash-flow discipline.
- In light of these factors and current market conditions, a cautious strategy is advisable. A better approach for long-term investors would be to wait for the stock to settle into a stable range after listing and consider accumulating on dips.
About the company
Founded in
18 Dec'09
Managing director
Vikram Vuppala
- NHSL provides comprehensive dialysis care through a wide network of clinics, offering a range of services that include diagnosis, treatment and wellness programs. Its offerings span haemodialysis, home and mobile dialysis, hemodiafiltration, holiday dialysis, dialysis on call and dialysis on wheels, all supported by an in-house pharmacy, ensuring patients receive convenient and holistic care.
- In FY25, NHSL treated 29,281 patients and completed 2,885,450 dialysis treatments in India, representing approximately 10% of the country's total dialysis patient population in FY25.
STRENGTHS
- Leading Position: NHSL is India’s largest dialysis service provider, commanding over 50% of the market share in India’s organized dialysis market in FY25. It is 4.4 times the size of the next largest dialysis provider in India based on operating revenue in FY24. In Asia, it holds the title of the largest dialysis service provider in 2025 and ranks as the fifth largest globally, based on the number of treatments performed in FY25.
- Extensive Network: NHSL operates a network of 519 clinics, including 51 international locations across the Philippines, Uzbekistan and Nepal. Notably, it operates the world’s largest dialysis clinic in Uzbekistan. Within India, the company has a presence in 288 cities across 21 states and 4 union territories, with ~77.35% of its clinics situated in tier II and tier III cities, addressing critical needs in underserved regions.
- Robust Growth: NHSL’s revenue from operations grew by 34% in FY25, while net profit surged by an impressive 91% compared to FY24.
- Improving Margins: EBITDA margin has steadily improved from 11.11% in FY23 to 22.05% in FY25, reaching 23.30% by H1FY26. Additionally, its net profit margin has grown from a negative (2.70%) to 8.88% in FY25, although it declined to 3% in H1FY26.
RISK FACTORS
- Dependence on PPP Contracts: NHSL has a significant reliance on public-private partnership (PPP) contracts, which accounted for ~31% of its revenue in H1FY26. There have been four instances in the past where individual PPP tenders were not renewed, and future non-renewals cannot be ruled out.
- International Exposure: A substantial portion of NHSL’s revenue comes from international operations, representing ~40% in H1FY26. This dependence exposes the company to risks related to currency fluctuations and regional disruptions, which could affect performance.
- High Attrition Rates: Dialysis operations heavily depend on trained medical staff. The attrition rate for nephrologists was high at 53.05% in FY25 and 27.68% in H1FY26. Inability to retain or attract skilled professionals could adversely impact the company’s business, operations and financial performance.
- Losses in Subsidiaries: Some of NHSL’s subsidiaries reported losses during H1FY26 and in the last three fiscal years. Continued losses in these subsidiaries could impair their operations and negatively affect the company’s consolidated financial performance.
- Slower Growth in H1FY26: Despite strong growth in FY25, NHSL experienced significantly slower growth in H1FY26, with net profit reaching just Rs 142.28 crore, compared to Rs 670.96 crore in FY25.
- Return Metrics & Profitability: While NHSL’s Return on Equity (ROE) of 13.45% and Return on Capital Employed (ROCE) of 18.67% in FY25 are decent, they remain lower than those of many listed peers. Additionally, despite improving profitability margins, its margins are still below those of its listed peers.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 871.05 crore
Fresh Issue
₹ 353.40 crore
OFS
₹ 517.64 crore
Price range
₹ 438 - 460
Lot size
32 shares
Issue Objective
The net proceeds from the fresh issue will be utilized for the following purposes:
- Opening new dialysis clinics in India;
- Pre-payment / repayment of certain borrowings availed by the Company; and
- General corporate purposes.
Dates
Bidding open
10 Dec'25
Bidding close
12 Dec'25
Allotment date
15 Dec'25
Refund date
16 Dec'25
Listing
17 Dec'25
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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