Jupiter Life Line Hospitals, a leading healthcare service provider in the Mumbai Metropolitan Area (MMR) and western region of India, is set to make its stock market debut on September 18. The company, which operates three multi-specialty hospitals with a total capacity of 1,194 beds, got listed on Indian stock market with a 32.4 percent premium over the issue price of Rs 735 per share.
Why Jupiter Life Line Hospitals got listed at such a high Premium?
The initial public offering (IPO) of Jupiter Life Line Hospitals, which raised Rs 869 crore during September 6-8, was subscribed 64.8 times, reflecting the strong demand from investors across all categories. The qualified institutional buyers (QIBs) segment was oversubscribed 181.89 times, while the high net-worth individuals (HNIs) and retail investors segments were oversubscribed 36 times and 8 times, respectively.
The experts attribute the robust subscription numbers to the following factors:
- The company has a strong brand recall in the MMR region, which accounts for over 90 percent of its revenue. The company offers advanced healthcare services in various specialties such as cardiology, neurology, oncology, orthopedics, and nephrology.
- The company has shown consistent improvement in its financial performance over the years. In FY23, the company reported a net profit of Rs 72.9 crore, up 42.6 percent year-on-year, on a revenue of Rs 892.5 crore, up 21.7 percent year-on-year. The company’s EBITDA (earnings before interest, tax, depreciation and amortization) margin also expanded to 22.55 percent in FY23 from 20.92 percent in FY22.
- The company has a strong growth potential as it plans to use the net fresh issue proceeds mainly for repaying debt worth Rs 510.4 crore, which will reduce its interest cost and improve its profitability. The company also plans to expand its capacity by constructing a fourth hospital in Dombivli, Maharashtra, with over 500 beds.
- The company operates in the healthcare sector, which has seen an increasing demand due to the COVID-19 pandemic and the rising awareness about health and wellness among the people. The healthcare sector is also considered as a defensive sector that can withstand economic downturns and market volatility.
Difficulties Jupiter Life Line Hospitals might face in Future
Jupiter Life Line Hospitals, despite being a leading healthcare service provider in the MMR and western region of India, may face some difficulties in the future. Some of the possible challenges are:
- The healthcare sector in India is facing a massive shortage of medical staff, infrastructure, and last mile connectivity in rural areas. Jupiter Life Line Hospitals may find it hard to recruit and retain qualified and experienced doctors, nurses, and paramedics, especially for its new hospital in Dombivli.
- The healthcare sector in India is also facing the epidemic of emerging chronic diseases and infectious diseases, such as diabetes, cardiovascular diseases, cancer, tuberculosis, and COVID-19. Jupiter Life Line Hospitals may have to invest more in preventive and curative care, as well as research and innovation, to cope with the changing disease profile and re-emerging diseases.
- The healthcare sector in India is also facing a multilayered and complex healthcare system, with different levels of public and private providers, varying quality standards, and regulatory issues. Jupiter Life Line Hospitals may have to deal with the competition from other private players, as well as the compliance with the government policies and schemes, such as Ayushman Bharat.
- The healthcare sector in India is also facing inadequate access to basic healthcare services for a large section of the population, due to poverty, illiteracy, social stigma, and cultural barriers. Jupiter Life Line Hospitals may have to adopt a more inclusive and affordable approach to reach out to the underserved and marginalized communities.
How to invest in Jupiter Life Line Hospitals?
If you are interested in investing in Jupiter Life Line Hospitals, you can buy its shares from the secondary market once they are listed on September 18. You will need a demat account and a trading account with a broker to buy and sell shares online.
You can also keep track of the company’s performance by following its quarterly results, annual reports, investor presentations, and other corporate announcements on its website.
You can also compare Jupiter Life Line Hospitals with its peers in the healthcare sector such as Apollo Hospitals Enterprise Ltd., Fortis Healthcare Ltd., Max Healthcare Institute Ltd., and Narayana Hrudayalaya Ltd., using various parameters such as revenue growth, profitability margins, return ratios, valuation multiples, etc.
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