HealthCare Global Enterprises IPO gets tepid response from non-institutional investors

NII category subscribed just 43%

The initial public offer (IPO) of HealthCare Global Enterprises (HGEL) received muted response from retail and non-institutional investors even as the IPO got good response from institutional investors. The category wise bidding data showed that the non-institutional investors (NII) category was subscribed just 43%. The retail investors' category was subscribed 83%. The bidding for the IPO ended yesterday, 18 March 2016. The Qualified Institutional Buyers (QIB) category was subscribed 2.36 times.

Ahead of the opening of the IPO, HealthCare Global Enterprises had raised Rs 292.33 crore by selling 1.34 crore shares to a total of 13 anchor investors. The shares were allotted to the anchor investors at Rs 218 per share, the top end of the Rs 205-218 per share price band for the IPO.

The IPO was a mix of fresh issue of shares by the company and offer for sale by existing shareholders. HGEL is a provider of speciality healthcare in India, focused on cancer and fertility. The company proposes to utilize Rs 42.20 crore from the net proceeds of the IPO towards purchase of medical equipment. It has earmarked Rs 30.19 crore for investment in IT software, services and hardware. The company will pre-pay debt worth Rs 147.05 crore from the proceeds of the IPO. The company had total borrowings of Rs 385 crore as on 30 November 2015.

Under the HCG brand, the company operates the largest cancer care network in India in terms of the total number of private cancer treatment centres licensed by the AERB. HGEL also provides fertility treatment under the Milann brand.

Based on consolidated financial performance, HGEL reported net loss of Rs 3.71 crore on sales of Rs 378.89 crore for eight months ended November 2015. The company reported a net profit of Rs 0.55 crore on sales of Rs 519.38 crore for the year ended 31 March 2015.

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