GPT HEALTHCARE LIMITED IPO: ISSUE SIZE, PRICE BAND AND MORE

The second IPO that opens for subscription week is - GPT Healthcare, a company that operates a chain of mid-sized, multi-specialty, full-service hospitals in Eastern India. The IPO opens for subscription on the 22nd of February and closes on the 26th of February. In this article, we look at the various aspects of GPT's business to help you decide whether to subscribe or invest in the IPO.

GPT Healthcare IPO: Key Details

Below are the key details related to the GPT IPO:

• Issue Size: Rs 525.14 crore
• Price Band: Rs 177 - Rs 186
• Lot Size: 80 Shares
• Issue Details: Fresh Issue of Rs 40 crore + Rs 485.14 OFS
• Market Cap: At the upper price band, Rs 1,526.22 crore
• Minimum Investment: Rs 14,880

GPT Healthcare IPO: The Business

They are one of the key regional corporate healthcare companies in Eastern India in terms of number of beds and hospitals as of FY23. GPT operates a chain of mid-sized full-service hospitals under the brand and provides integrated healthcare services, with a focus on secondary and tertiary care.

GPT Healthcare offers a comprehensive range of healthcare services across over 35 specialties and super specialties, including internal medicine and diabetology, nephrology, laparoscopic and general surgery, gynecology and obstetrics, critical care, gastroenterology, orthopedics and joint replacements, interventional cardiology, neurology, neurosurgery, pediatrics, and neonatology. 

They strategically focus on the relatively under-penetrated healthcare market in Eastern India. They have a presence in three cities, which has provided them an understanding of regional nuances, patient culture, and the mindset of medical professionals and where there is under-penetration of quality and affordable healthcare services.

Here is the table that sets out the bed capacity of hospitals inclusive of the beds across ICUs and HDUs.

GPT Healthcare IPO: Industry Overview

The healthcare delivery market in India is expected to grow at a CAGR of 9% - 11% between FY24 and FY28 and reach Rs 9.2-9.3 trillion in FY28. The share of treatments (in value terms) by private players is expected to increase from 64% in FY18 to nearly 70% in FY28. 

According to CRISIL, East, and North-East states in India have a population of approximately 388 million people, contributing to 28% of

India’s population as of FY22. The East and North-East regions of India also contributed ~ 15.3% to India’s GDP in FY22 and have witnessed GSDP growth at a CAGR of 5.1% from FY12 and FY22.

GPT Healthcare IPO: Listed Peers

The company has quite a few listed peers - Global Health, Krishna Institute of Medical Science, Jupiter Life Line Hospitals, Yatharth Hospital & Trauma Care Services, Kovai Medical Center & Hospital, and Shalby. Let us look at GPT's FY23 numbers and compare them with peers to see where it stands:

• In revenue terms, GPT Healthcare is the smallest player, while Global Health is the largest player.
• The average EPS of all listed peers is around 32, and GPT has an EPS of Rs 4.88 - the lowest among peers.
• The average Return on Net Worth (RoNW) of listed peers is approx 19%, while that of GPT is 23.77%, only less than Yatharth Hospital & Trauma Care Services.

For details, check the below table.

GPT Healthcare IPO: Financials

Below are the financial numbers of GPT Healthcare from recent years:

• The revenue for FY21, FY22, and FY23 was Rs 242.75 crore, Rs 337.41, and Rs 361.04 crore, respectively. The top line grew at a CAGR of 21.95 % in the period between FY21 and FY23.
• The revenue from private patients comprised 94.74%, 94.63%, and 87.90% of their revenue from operations in FY23, FY22 and FY21, respectively. GPT Healthcare has reported an EBITDA of Rs 55.10 crore, Rs 78.82 crore, and Rs 80.04 crore for FY21, FY22, and FY23, respectively. The EBITDA margins for the same period were 22.14%, 23.02%, and 21.83%, respectively. The margins have remained flat in this period.
• They have reported a net profit (PAT) of Rs 21.09 crore, Rs 41.66 crore, and Rs 39.01 crore for FY21, FY22, and FY23. The profit margins have increased from 8.48% in FY21 to 10.64% in FY23.
• For the last three financial years, GPT has reported an average EPS of Rs 4.62 and an average RoNW of 23.38 %. 
• If we attribute FY24 annualized earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 32.52. 
• ROCE for FY21, FY22 and FY23 was 14.48%, 25.04% and 26.09%, respectively,
• For FY23, FY22 and FY21, they recorded a bed occupancy rate of 58.92%, 56.36%, and 48.00%, respectively.