Medi Assist Healthcare fixes price band for IPO at Rs 397- Rs 418

Bids for the offer can be made for a minimum of 35 equity shares and in multiples of 35 thereafter

Medi Assist Healthcare Services, a third-party health administrator for insurance companies, has set the price band for its Initial Public Offering (IPO) between Rs 397 and Rs 418 per equity share, each with a face value of Rs 5. The company aims to raise approximately Rs 1,171.58 crore through the IPO, which will open on January 15, 2023, and close on January 17, 2023.

The IPO consists solely of an offer-for-sale (OFS) of 2.8 crore equity shares by the selling shareholders, without any fresh issue component. The floor price is 79.40 times, and the cap is 83.60 times the face value of the shares. The Anchor Investor Bidding will commence on January 12, 2023.

The company will not receive any proceeds from the Offer for Sale (OFS) as these will be paid to the selling shareholders.

Promoters Vikram Jit Singh Chhatwal, Medimatter Health Management, and Bessemer Health Capital LLC, alongside investor Investcorp Private Equity Fund I, are the major shareholders divesting their stake in the OFS.

"A significant portion of what I am selling is part of the retiring debt obligations I had when I bought the business. Over 80 per cent of what I am selling is towards retiring my debt obligations," said Chhatwal who is the chairman of the company during in a press conference.  

Of the total offer, 50 per cent is reserved for qualified institutional buyers (QIBs), 35 per cent for retail investors, and 15 per cent for non-institutional investors.

Axis Capital, IIFL Securities, Nuvama Wealth Management, and SBI Capital Markets are the book-running lead managers, with Link Intime India serving as the registrar for the IPO.

Incorporated in June 2000, Medi Assist Healthcare Services provides third-party administration services to insurance companies. It collaborates with group accounts (employers) to administer their employee health insurance plans in India and partners with insurance companies to manage health insurance plans for retail customers (individual policyholders) and publicly funded health schemes.

As of FY22, the company is the largest health benefits administrator in India in terms of premium under management for retail and group policies, holding a market share of 14.83 per cent in the retail health and 41.71 per cent in the group health insurance market.

At the end of FY23, the company managed health insurance premiums worth Rs 145,746.49 million, growing at a CAGR of 35.67 per cent from Rs 79,184.93 million at the end of FY21. As of September 2023, the company works with 35 insurers both in India and globally.

The company's provider network comprises more than 18,000 hospitals across 1,069 cities and towns and 32 states.

The largest TPA in the country, projects the health insurance premiums serviced by the industry to grow 24 per cent CAGR by FY28 to nearly Rs 1.51 trillion from Rs 39900 crore in FY22.

Further, the management added that TPA penetration of total premium sold in India was up at 55 per cent and is expected to grow to 61 per cent.

“As the pie enlarges, more and more involvement or partnerships between TPAs and insurers is seen.  I think in many ways, it mimics what we see around the world.  Also, what is more notable,  is the complexity  in the health insurance ecosystem --- complexity relating to the volume and types of claims  that come in,  complexity relating to the need  for technology and automation,  complexity relating to the scale and the size of networks,  both on the inpatient and the outpatient market,” said Chhatwal.   

He also added that, “All of these factors are pointing towards a new normal, where I believe the role of TPAs will continue to remain relevant,  and will continue to grow in partnering with insurers and administering  their health insurance plans.”

For the six months ending September 30, 2023, Medi Assist Healthcare reported a net profit of Rs 22.49 crore and revenue of Rs 312.03 crore. In the financial year ending March 31, 2023, the company reported a net profit of Rs 74.04 crore and revenue of Rs 518.96 crore.

Going forward, the company is focussed on organic growth supported by tailwinds of health insurance and performance of their insurance partners. Capital expenditure is expected to be 2 per cent to 3 per cent of the revenue depending on the requirement

“We have just completed the building out of our technology platform and we have capitalized Rs 10 crore in FY23. We don’t plan any investment into that because it is just about maintaining and that goes into the P&L. At an overall capex level, we expect between 2 per cent – 3 per cent of revenue to go into capex and that is more due to offices and continuing the regular work and that may or may not be spent depending on the discretion and judgement of the management.” Mathew George, CFO, Medi Assist Healthcare Services noted. 

Manappuram arm’s IPO put on hold 

Capital markets regulator Sebi has kept in “abeyance” the proposed Rs 1,500 crore Initial Public Offering (IPO) of Asirvad Micro Finance, a subsidiary of listed NBFC Manappuram Finance.

However, Sebi did not clarify further. Shares of Manappuram Finance plunged as much as 7.45 per cent to a low of Rs 163.40 apiece on the BSE on Wednesday. 


Nuvama Asset Management, Cushman & Wakefield plan commercial realty fund

Asset manager Nuvama Asset Management and real estate advisory major Cushman & Wakefield have joined hands to launch a commercial realty fund. Nuvama and Cushman & Wakefield Management Private (NCW), a 50:50 joint venture, plans to launch their first real estate fund – Prime Offices Fund. The category-II alternative investment fund (AIF)— which is still awaiting market regulator Sebi’s approval—is targeting a corpus of Rs 3,000 crore.

The fund will eye opportunities in Grade A+ office space across micro markets in the top 6 cities of Bengaluru, NCR, Pune, Mumbai, Chennai, and Hyderabad. 

“Our global real estate expertise, coupled with Nuvama’s local market knowledge and investment acumen, will create an unrivalled value proposition for investors,” said Matthew Bouw, Chief Executive, Asia Pacific, Cushman & Wakefield. “Global institutional investors have taken the lead and defined a successful playbook for investing in this sector. Domestic investors have largely remained under-allocated in this segment or participated through fragmented ownership without access to operational capabilities required to manage these real assets,” added Anshu Kapoor, President & Head of Nuvama Asset Management.