Narayan Hrudayalaya Limited has filed its IPO draft prospectus with capital market regulator SEBI. The IPO, comprising of sale of 20.4 million shares, will be managed by Axis Capital, IDFC Securities and Jefferies. According to the draft red herring prospectus (DRHP) filed with SEBI, the IPO will only comprise of offer for sale (OFS) and thus, the company will not receive any proceeds from the public issue.
The Bengaluru-based healthcare service provider, which specializes in the treatment of heart diseases, has not disclosed the pricing of the IPO. However, what’s known at this time is that some of the existing investors including JP Morgan, Ambadevi, Ashoka Holdings, Dr. Devi Prasad Shetty, and Shakuntala Shetty will be selling their shares. The biggest chunk of shares will be offloaded by JP Morgan which plans to sell 8.17 million shares. Ashoka Holdings plans to sell 6.28 million shares while 2.04 million shares will be offered by Dr. Devi Prasad Shetty and Shakuntala Shetty each.
Apart from JP Morgan, CDC Group is another private equity investor in the company while Kiran Mazumdar Shaw also holds a substantial position. Neither CDC nor Kiran Mazumdar Shaw will be participating in the IPO.
Healthcare is not the best choice for a scalable business model but Narayan Hrudayalaya has expanded considerably after starting operations in 2000. In a matter of 15 years, the company has expanded its network to 23 multispeciality and superspeciality hospitals, 8 heart centres, and 25 primary care facilities across 32 cities, towns and villages. As of July 2015, Narayan Hrudayalaya had 5,600 operational beds and 11,478 employees and students. This includes 818 doctors, 5,438 nurses, 2,009 paramedical staff, as well as 1,660 doctors which are engaged on a consultancy basis.
Markets not doing well but liquidity not an issue
Although the primary market has not performed well in recent months, several other players in the healthcare sector have started the process to bring their IPOs. Important among these are HealthCare Global, Thyrocare Technologies Ltd, Dr Lal Path Labs and Aster DM Healthcare which have either filed draft prospectus or are in the process.
Read Also: Dr Lal Path Labs files prospectus for IPO
Several recent listings have either gone below the issue price or have been only marginally positive. This includes Prabhat Dairy and Sadbhav Infrastructure among others. As it turns out, the problem is not with the liquidity in the market but with the steep pricing of the IPOs.