HealthCare Global makes dismal debut on bourses

It operates one of the largest cancer-care networks in the country, with 14 comprehensive cancer centres

Shares of cancer-care hospital chain operator, HealthCare Global Enterprises (HCG), made a dismal debut on bourses on Wednesday, slipping around 20 per cent below its issue price. The stock opened 3.5 per cent lower at Rs 210.2 and touched a high of Rs 211.9 on the National Stock Exchange. After touching a low of Rs 169.1, the stock closed at Rs 170.25.

This was on a day the benchmark 50-share Nifty index rose 1.8 per cent, or 138 points, to 7,735. The initial public offering (IPO), which closed on March 18, was subscribed 1.56 times, according to data available on stock exchanges.

HCG is the fourth company after Precision Camshafts, TeamLease Services and Quick Heal Technologies to hit Dalal Street with an IPO in 2016. The company had fixed the issue price of Rs 218 a share for the IPO and had raised Rs 357 crore.

Kotak Mahindra Capital, Edelweiss Financial Services, IDFC Securities, Goldman Sachs, IIFL Holdings and YES Bank were the lead managers to the HCG issue. HCG operates one of the largest cancer-care networks in the country, with 14 comprehensive cancer centres. According to analysts, higher operational expenses and interest burden due to ongoing expansion have pegged back the company’s margins and profits. A recent Angel Broking report said an improvement in margins, along with improvement in capacity utilisation, are key to achieving a high return on equity and for HCG’s business to sustain.

This is the fourth health care firm that has made its debut since December. The other three - Alkem Laboratories, Dr Lal PathLabs and Narayana Hrudayalaya – all made a stellar debut on the bourses, gaining anywhere between 31 per cent and 50 per cent.

Experts say foreign investors have strong appetite for the health care space, seeing this as a multi-decade growth story. They estimate listed healthcare assets on the exchanges to be only about $3 billion (Rs 20,000 crore) and there is scope for more companies to come on board.