Manipal Health lists at 11% premium, beats GMP estimates; should you buy?

Manipal Health Enterprises share price: On Dalal Street, Manipal Health Enterprises will directly compete with major listed hospital peers like Apollo Hospitals, Max Healthcare, and Fortis Healthcare.

Manipal Health Enterprises share price: Manipal Health Enterprises shares on Wednesday made a positive debut on the bourses, yielding a thin listing gain of around 11 per cent. Its shares debuted at ₹655 on the BSE, up ₹65 or 11.02 per cent versus the IPO issue price of ₹590.

 

On the NSE, Manipal Health Enterprises shares opened at ₹652, up ₹62 or 10.51 per cent.  

 

The Bengaluru-based company commanded a market capitalisation of ₹86,157.21 crore on debut, according to BSE.

 

The listing of Manipal Health Enterprises was above the grey market expectations, which had signalled a flat-to-negative opening. 

 

 

On Dalal Street, Manipal Health Enterprises will directly compete with major listed hospital peers like Apollo Hospitals, Max Healthcare, and Fortis Healthcare.

 

The price band for the ₹9,275 crore IPO was ₹560-590 per share, valuing the company at a little over ₹77,600 crore at the upper end.  Manipal Health stock: Should you buy? 

Shivani Nyati, head of wealth, Swastika Investmart, said that Manipal Health Enterprises' strong listing reflects healthy investor demand. However, despite the positive listing, the stock is trading at a premium valuation with limited margin of safety. 

 

"A major portion of the IPO proceeds will be used to repay acquisition debt, leaving limited funds for future expansion, while the company also remains highly dependent on Karnataka, which contributes nearly 46–60 per cent of its revenue," she said.

 

"Investors who received the allotment can continue to hold the stock, while fresh investors should wait for better entry levels or signs of further debt reduction before buying. Maintain a stop-loss at ₹620 to protect listing gains," Shivani added. 

  CHECK Stock Market LIVE Updates  

The Manipal Health Enterprises IPO, comprising a fresh issue of equity shares worth up to ₹8,000 crore and an Offer-for-Sale (OFS) of up to 2.16 crore equity shares by existing shareholders, was subscribed nearly five times, led by Qualified Institutional Buyers (QIBs). The portion reserved for QIBs received 8.25 times subscription, while the quota for non-institutional investors was subscribed 1.02 times. The portion reserved for retail investors received 93 per cent subscription.

 

Promoters Imperius Healthcare Investments Pte. Ltd. and Manipal Education and Medical Group India Pvt. Ltd, along with shareholders TPG SG Magazine Pte. Ltd., Seventy Second Investment Company LLC, Ammar Sdn Bhd, Novo Holdings Invest Asia and Phoenix Bear Investments, LLC, pared their stakes through the OFS.

 

Ahead of the IPO, Manipal Health had raised ₹4,167 crore from anchor investors. The anchor book attracted several global investors, including Abu Dhabi Investment Authority (ADIA), Allianz Global Investors Fund, Morgan Stanley Asia, Natixis International Fund, Societe Generale and Goldman Sachs Bank Europe. Additionally, ICICI Prudential Mutual Fund (MF), Kotak MF, Aditya Birla Sun Life MF, UTI MF and HSBC MF also participated in the anchor round.

 

The company has proposed to utilise ₹5,378 crore from the fresh issue towards repayment or prepayment of borrowings of its subsidiary, Manipal Hospitals Pvt Ltd. It has earmarked ₹574 crore for acquiring the minority stake in step-down subsidiary Sahyadri Hospitals Pvt Ltd, while the remaining funds will be used for general corporate purposes.

 

Manipal Health operates a pan-India network of multispecialty hospitals offering services ranging from outpatient care to tertiary and quaternary interventions.