Medi Assist Healthcare Services IPO booked 3.4x on day 3 so far; NIIs portion subscribed over 5 times

The initial public offering (IPO) of Medi Assist Healthcare Services witnessed a decent response from the investors during the third and final day of the bidding process as institutional investors joined the party. The issue was subscribed 54 per cent by the end of day one and ended day two with 1.7 times subscription.

The Bengaluru-based Medi Assist Healthcare Services is offering its shares in the price band of Rs 397-418 apiece with a lot size of 35 shares and its multiples thereafter. The company is looking to raise a total of Rs 1,171.58 crore via its primary offering, which is entirely an offer-for-sale (OFS) of more than 2.80 crore equity shares.

According to the data, the investors made bids for 6,33,80,555 equity shares, or 3.23 times, compared to the 1,96,19,719 equity shares offered for the subscription by 1.15 pm on Wednesday, January 17. The bidding for the issue, which had opended on Monday, concludes today itself.

The allocation for retail investors was subscribed 2.48 times, while the portion reserved for non-institutional investors saw a subscription of 5.37 times. However, the quota set aside for qualified institutional bidders (QIBs) attracted 3.32 times bids as of the same time.

Medi Assist Healthcare Services is a health-tech and insurance-tech company that manages health benefits for employers, retail members, and public health schemes, primarily serving insurance companies. Incorporated in June 2002, Medi Assist offers medical insurance and cashless hospitalization through a network of healthcare service providers.

Brokerage firms are mostly positive on Medi Assist Healthcare Services IPO and suggest to subscribe for long term. They are positive on company's strong market share, promoter background and niche business model. However, aggressive valuations and complete OFS nature of the are only drawbacks.

"The company’s focus is on retaining insurer partnerships, minimizing churn and continued to grow both organically and through M&A activities whenever there is any opportunity available, said Arihant Capital Markets in IPO note.

"The company seeks to reduce service calls related to claims, admissions and discharges and increasing coverage within its current client base rather than relying solely on acquiring new clients. The issue is valued at a P/E of 38.2x based on FY23 EPS of Rs 10.9, which is premium valuation against Peers, but looking at their growth achieved over years," it added with a 'subscribe' tag.

Ahead of its IPO, Medi Assist Healthcare mobilised Rs 351.5 crore through its anchor investors by allocating 84,08,449 shares at Rs 418 apiece. 50 per cent shares have been reserved for qualified institutional bidders (QIBs), while 15 per cent shares shall go to non-institutional investors (NIIs). Remaining 35 per cent of the net offer shall go to retail investors.

The company is valued at FY23 P/E and EV/EBITDA multiple of 38.9 times and 22.3 times based on the upper price band on post-issue capital. The company has consistently delivered healthy financial performance. The company holds 17.3 per cent of the total premium served in the TPAs industry, said SBICap Securities.

"Premium serviced by TPA’s is expected to grow at a CAGR of more than 24 per cent with penetration expected to increase further to 61.2 per centfrom 54.7 per cent during FY22-FY28F on back of enhanced value proposition to insurers by TPAs," it added without rating the issue.

Nuvama Wealth Management , Axis Capital, IIFL Securities and SBI Capital Markets are the book-running lead managers for the issue, while Link Intime India is the registrar for the IPO of Medi Assist Healthcare. The company's shares are set to be listed on both the BSE and NSE on Monday, January 22, 2024.

 

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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