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Medi Assist Healthcare Services IPO Check issue size price band and more

08 Feb 2024

Introduction:

After a stellar 2023, which saw more than 60 mainboard Initial Public Offerings (IPOs) hitting the D-street, the momentum has shifted to 2024. Medi Assist Healthcare Services Limited is among the slew of companies launching their IPOs in January. The health tech and insurance tech companies plan to raise 1,171.58 crores through an offer for sale of around 280.28 lakh equity shares.

Medi Assist Healthcare Services IPO will open for subscription on Monday, 15 January 2024, and closes on Wednesday, 17 January 2024. It will be a book-building IPO, with the price band being set in the range of Rs. 397 to Rs. 418 per share. Continue reading to learn more details about the IPO, including lot size, listing date, face value, Grey Market premium (GMP) and more.

About Medi Assist Healthcare Services Limited

Incorporated in 2002, Medi Assist Healthcare Services Limited offers third-party administration services to insurance companies via its wholly-owned subsidiaries, namely Medi Assist TPA, Medvantage TPA, and Raksha TPA. The company oversees health benefits for employers, retail members, and public health schemes, primarily serving as the main service provider for the insurance companies that introduce these health insurance schemes. For instance, the company ensures cashless hospitalisation services promised by insurers at its network hospitals.

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As of 31 March 2023, the client portfolio of Medi Assist Healthcare Services Limited includes Group Accounts (74%), retail members (11%), government schemes (11%), and other contractual agreements. The company has a pan-India healthcare network comprising 18,750 hospitals across 1,069 cities and towns. For the financial year 2023, the company successfully processed 5.27 million claims, comprising 2.44 million in-patient claims and 2.83 million out-patient claims.

Key Strengths of the Company

Below are the primary strengths of Medi Assist Healthcare Services Limited (as stated in the company’s Red Herring Prospectus):

  • It is a reputed and well-established third-party healthcare administration service provider in India
  • Boasts an extensive network of 18,750 hospitals across 1,069 cities and towns
  • Enjoys long-standing relationships with the most reputed health insurance providers
  • Capacity to negotiate and secure discounted rates as well as preferential packages with hospitals
  • Proven track record of seamless acquisitions and business expansion

Key Risks or Weaknesses Highlighted

Below are the key risks or weaknesses associated with Medi Assist Healthcare Services Limited:

  • The company services a significant portion of the revenue from limited clients
  • There are ongoing legal and regulatory proceedings involving the company’s promoters
  • Business operandi is subject to IRDAI (Insurance Regulatory and Development Authority of India) regulations

Core Financials of the Company

Analysing the issuing company’s financials is crucial when investing in an IPO. The financials of Medi Assist Healthcare Services Limited paint a robust picture, with the company’s net worth improving gradually from Rs. 293 crores in FY21 to Rs. 384 crores in FY23. The revenue from operations has also increased from Rs. 323 crores to Rs. 505 crores in the same period. The profit after tax (PAT) and the return of net worth for FY23 stood at Rs. 75 crores and 20%, respectively.

The table below depicts the key financials of Medi Assist Healthcare Services Limited for the last three completed financial years:

Particulars For the Period Ended Sept. 2023 As of and for FY Ended March 31
2023 2022 2021
Share Capital 34 34 34 3
Net Worth 417 384 339 293
Revenue From Operations 302 505 394 323
EBITDA Adjusted 62 119 91 76
Profit After Tax 24 75 63 38
Earnings Per Share (Diluted) 3 11 9 6
Return on Net Worth 6% 20% 19% 13%
Premium Under Management 9543 14575 11049 7918

Source – RHP dates 9 January on the SEBI website

Details of the IPO

As mentioned before, Medi Assist Healthcare Services' IPO will open for subscription on Monday, 15 January 2024, and close on Wednesday, 17 January 2024. Retail investors can apply for a minimum of 35 shares (one lot) and in multiples thereof within the price band of Rs. 397 to Rs. 418 per share. 

The table below illustrates additional IPO details:

IPO Date 15 January to 17 January 2023
Basis of Allotment 18-Jan
Listing Date 22-Jan
Face Value Rs. 5 per share
Price Band Rs. 397 to Rs. 418
Lot Size 35 shares
Total Issue Size 28,028,168 shares (up to Rs. 1,171.58 crores)
Offer For Sale 28,028,168 shares (up to Rs. 1,171.58 crores)
Issue Type Book Built Issue
Listing At NSE, BSE

 

The bottom line

Before investing in an IPO, you must analyse several key factors, including the issuing company’s financials, strengths, weaknesses, growth prospects, objectives, GMP, etc. As of 11 January 2024, the GMP of Medi Assist Healthcare Services IPO is Rs. 81, which indicates a listing gain of 19.38% on the upper price band. 

 

Related Articles:  How to Analyse an IPO | What is IPO Grading? | What is Cut Off Price In IPO Application 

 

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