KIMS IPO subscribed 34% so far on Day 2

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The initial public offer of Krishna Institute of Medical Sciences Limited got subscribed 34% on the second day of the bidding process on Thursday.

The IPO received bids for 49,66,902 shares till 12.30 pm (IST) against 1,44,13,073 shares on offer, as per data available with the NSE.

The initial public offer comprises a fresh issue of up to Rs 200 crore and an offer for sale of up to 2,35,60,538 equity shares.

Krishna Institute of Medical Sciences Ltd on Tuesday raised over Rs 955 crore from anchor investors. The company has fixed a price band of Rs 815-825 per share for the ongoing public offer. At the upper end of the price band, the IPO is expected to fetch Rs 2,144 crore.

Krishna Institute of Medical Sciences (KIMS) is one of the largest corporate healthcare groups in Andhra Pradesh and Telangana in terms of number of patients treated and treatments offered.

Kotak Mahindra Capital Company, Axis Capital, Credit Suisse Securities (India) and IIFL Securities are the managers to the offer.

Should you invest? ICICI Securities has a ‘Subscribe’ rating on KIMS. The company owns one of the largest hospital chains in AP and Telangana. It reported Rs 1340.1 crore of revenues and Rs 381.0 crore of adjusted EBITDA in FY21, the highest in AP and Telangana. It has 3,064 beds as of 9MFY21, which is 2.2 times more beds than the second-largest provider in these regions.

“KIMS has achieved healthy profitability in both Tier I and Tier II, III markets by identifying markets with significant underserved healthcare demand and delivering quality healthcare services at affordable prices, which, in turn, drives patient volumes. As of FY21, KIMS’ debt-to-adjusted EBITDA ratio was 0.71 times and the gearing ratio was 0.31x compared to the industry range of 0.1-5.2 times. It has achieved strong free cash flow by effectively managing capex. KIMS is one of only three hospitals in India that are rated AA by Crisil,” ICICI Securities said in a report.

Ventura Securities also has a ‘Subscribe’ rating on KIMS. “KIMS strong brand equity, and cluster-based expansion in adjacent markets of Central India (Indore, Aurangabad, Raipur & Nagpur), Odisha (Bhubaneshwar), Karnataka (Bengaluru and greater Karnataka) and Tamil Nadu (Chennai) augurs well for sustaining high growth with strong profitability,” Ventura Securities said.