GPT Healthcare makes good market debut; stock lists 16% over issue price

GPT Healthcare made a good stock market debut with its shares getting listed at Rs 216.15, a 16 per cent premium over its issue price of Rs 186 per share on the BSE on Thursday. The hospital stock listed at Rs 215 on the National Stock Exchange (NSE).

Post listing, the stock hit a high of Rs 219.70 and a low of Rs 205 on the BSE. At 10:03 AM, GPT Healthcare was trading at Rs 205.65, 5 per cent lower than its listing price and 11 per cent higher against its issue price. A combined 7.1 million equity shares have, thus far, changed hands on the NSE and BSE.

The Rs 525-crore public issue saw a strong demand from investors. The issue was subscribed 8.5 times with the portion allotted to Qualified Institutional Buyers (QIBs) seeing a subscription of 17.3 times, while the non-institutional category was over-subscribed by 11 times, and retail investors 2.44 times.

The company offers a range of healthcare services in over 35 specialties and super-specialties, including internal medicine and diabetology, nephrology (including kidney transplant), laparoscopic and general surgery, gynaecology and obstetrics, intensive care, gastroenterology, orthopaedics and joint replacement, interventional cardiology, neurology, neurosurgery, paediatrics, and neonatology. It also offers integrated diagnostic services and pharmacies.

In Eastern India, GPT Healthcare is a prominent regional corporate healthcare company with respect to the quantity of hospitals and beds. The company has strategically concentrated on the comparatively unexplored healthcare industry in Eastern India, where it operates in three cities.

The company's location and specialty mixes are both very diversified. On the other hand, the company faces competition from other healthcare service providers and it has a low occupancy rate, said Swastika Investmart in its IPO note.

"The issue comes at a PE valuation of 38.1x which seems fairly priced. But considering all the other factors, we suggest investors to carefully evaluate their risk tolerance and conduct further due diligence before making an investment decision," the brokerage firm had said.

GPT Healthcare operates a chain of mid-sized full-service hospitals under the same brand and provides integrated healthcare services with a focus on secondary and tertiary care.

Going ahead, the company intends to strengthen its existing hospitals by further balancing specialty mix, deepening its expertise in selective specialties, and adding new specialties and services, according to analysts at Anand Rathi Share and Stock Brokers. On the valuation front, brokerage firm believes that the company is fairly priced.