Shalby Healthcare IPO Opens Today: Ten Things That You Should Know

After Apollo Hospitals and Narayana Hrudayalaya, one more chain of hospitals, Ahmedabad-based Shalby Healthcare, is set to be listed on the stock exchanges. Shalby Healthcare's IPO hit the market today and will close on December 7. At the upper band of Rs 248, company's price/earnings ratio would stand at 42.8, making the valuation look high, say experts. However, Reliance Securities recommends 'subscribe' since the valuation is not expensive vis-a-vis its peers such as Apollo. The price band of Shalby's IPO is Rs 245 to Rs 248 per share and an offer can be made in the lot sizes of 60 shares. Post the Rs 504 crore IPO, the promoters' stake would fall from the current 97.9 per cent of company's paid up capital to 79.4 per cent. 

Ten things that you should know about the Shalby IPO

1. The Shalby IPO opened on December 5 and will end on December 7, 2017.

2. The shares will be issued in the price band of Rs 245 and Rs 248 for shares with a face value of Rs 10.

3. The P/E ratio (price in the upper band of Rs 248) is 42.8 of company's earnings in the fiscal 2017 and 71.3 and 104.1 of the earnings of fiscal 2016 and 2015, respectively, says Reliance Securities.

4. The company's strengths include leadership in orthopedics, and company's good track record of healthy operating and financial performance, Reliance Securities says in an IPO note.

5. The major risks for Shalby Healthcare are too much dependency on two hospitals SG Shalby and Krishna Shalby, and on orthopedic for a substantial portion of revenue.

6. The company runs 11 hospitals with an aggregate bed capacity of 2,012 beds.

7. The issue size is Rs 504.8 crore at the upper band and the post-issue market cap is Rs 2,679 crore.

9. Another risk that the company faces is that revenue is primarily derived from inpatient treatments, which could decline due to multiple factors.

10. The company's sales grew by a strong 12% YoY in fiscal 2017 from 5% in the fiscal 2016. Its operating income and net profit grew by 30% year on year and 60% year on year in fiscal 2017.