Narayana Hrudayalaya's IPO sails through on bourses

Issue was subscribed 8.5 times, with bids received for 145 mn shares

Private health care service provider Narayana Hrudayalaya’s Rs 613-crore initial public offering (IPO) was oversubscribed at least around eight times on the bourses by  the final day. This is the third issue of a health care firm to sail through this month.  

The issue was subscribed 8.45 times, with bids received for 145 million shares against the total issue size of 17 million shares, data available with the NSE as of 5 pm showed.

The largest number of bids came in from foreign institutional investors (FIIs) under the qualified institutional buyers (QIBs) quota, which was subscribed 24.4 times. The retail category was subscribed 1.5 times, while the non-institutional category, which includes investment from high net-worth individuals was subscribed 3.6 times as of 5 pm, a merchant banker handling the issue said.

“We got one of the best anchor books for the issue, with several long-term investors supporting it. Investors are bullish on the healthcare space, especially hospitals, and Narayana Hrudayalaya has a unique business model and the backing of good quality management,” said Dharmesh Mehta, managing director and chief executive officer, Axis Capital.

Narayana Hrudayalaya had raised Rs 184 crore from 15 anchor investors last week, including the government of Singapore and a number of domestic mutual funds, at Rs 250, upper end of the price band. The IPO had set a price band of Rs 245-250 for the sale.

Nearly a fourth of the issue is an offer for sale from existing promoters, including founder-chairman Devi Shetty and institutional shareholders Ashoka Investment and Ambadevi Mauritius. The merchant bankers to the issue were Axis Capital, IDFC Securities and Jefferies India.

This is the third IPO in the healthcare segment in the past month, with earlier issues of Alkem Laboratories and Dr. Lal Path Labs getting oversubscribed 44 and 33 times, respectively. Both issues were offer for sale from existing shareholders and didn’t involve issue of fresh shares.

Healthcare IPOs have seen robust demand from all investor segments in contrast to recent marquee offerings of InterGlobe Aviation and Coffee Day Enterprises which were given a miss by retail investors.

Experts suggest that investors in healthcare IPOs are betting on an increase in demand for healthcare services on the back of rising incomes in the country.

KEY TAKEAWAYS

• This is the third issue of a health care firm to sail through this month
   
• The largest number of bids came from FIIs under the QIBs quota, which was subscribed 24.4 times
   
• Narayana Hrudayalaya had raised Rs 185 crore from 15 anchor investors last week
   
• Experts say investors are betting on increase in demand on the back of rising incomes