KIMS IPO: All You Need To Know
A medical worker takes an x-ray of a Covid-19 patient in an additional ICU set up to cope with the pandemic at the Ambroise Pare Clinic in Paris. (Photographer: Nathan Laine/Bloomberg)

KIMS IPO: All You Need To Know

General Atlantic-backed hospital chain Krishna Institute of Medical Science Ltd. will sell shares at Rs 815-825 apiece to raise up to Rs 2,144 crore in its initial public offer.

The south India-based healthcare company’s three-day IPO—which opens on June 16—comprises a fresh issue worth Rs 200 crore and an offer-for-sale by a General Atlantic entity, General Atlantic Singapore KH Pte Ltd., to divest 2.35 crore shares, according to its filings.

The institute will use Rs 150 crore from the new stock issue to pare debt.

General Atlantic will sell 50% of its stake and retain 20% of the post-issue equity. The promoters, also selling shares, will own 39% after the offer, while 61% stake will be with public shareholders.

The IPO accounts for 32.5% of the post-issue equity capital.

KIMS among the largest healthcare groups in Andhra Pradesh and Telangana by number of patients treated, operates nine multi-specialty hospitals with an aggregate bed capacity of 3,064, including more than 2,500 operational as of March 31, 2021.

Key Details

  • Fresh issue: Aggregating up to Rs 200 crore.
  • Offer for sale: Rs 1,920.18 crore-Rs 1973.74 crore.
  • Minimum bid size: 18 equity shares and in multiples thereof.
  • Listing: NSE and BSE.
  • Book running lead managers: Axis Capital, Kotak Mahindra Capital, Credit Suisse Securities, IIFL Securities

Post issue, the market value of the hospital chain will be Rs 6,602 crore at the upper end of the price band.

Who Owns KIMS

The promoters—the Bollineni family—will hold 39% stake after the issue, while General Atlantic will hold 20%.

Business

The hospital chain offers healthcare services in more than 25 specialties and super specialties, including cardiac sciences, oncology, neurosciences, gastric sciences, orthopaedics, organ transplantation, renal sciences, and mother and childcare.

The top 10 doctors contributed 22% to the chain’s total number of patients, while the contribution of top 25 doctors stood at 36%.

KIMS has had an occupancy rate at 79% in the year ending March 2021, according to its filings.

Revenue from its top two hospitals in Secunderabad and Kondapur accounts for 64% of the total business in FY21.

Operational Metrics

In FY21, their nine hospitals recorded average revenue per occupied bed of Rs 20,609, a bed occupancy rate of 78.60%, and an average length of stay of 5.53 days, on an aggregate basis.

In fiscal 2021, average revenue per occupied bed for hospitals in tier 1 cities was Rs 39,571, while it stood at Rs 11,187 for those in tier 2 and tier 3 cities.

In FY20, capital expenditure per bed stood at Rs 63.5 lakh for tier-1 city hospitals and Rs 22.1 lakh for hospitals in tier 2 and tier 3 cities, compared to the industry average of Rs 50-80 lakh in tier 1 cities and Rs 10-50 lakh in tier 2-3 cities. Capital expenditure per bed rose to Rs 69.10 lakh in FY21.

Financials

The company reported consolidated total income of Rs 1,330 crore and a net profit that nearly doubled due to organ transplants at its hospitals. Net profit stood at Rs 205 crore in FY21.

Peer Comparison

The company competes with hospital chains like Apollo Hospitals Enterprise Ltd., Narayana Hrudayalaya Ltd., Max Healthcare Ltd. and Fortis Heathcare Ltd.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.