Medi Assist Healthcare Services IPO : 7 things to know
Medi Assist Healthcare Services Ltd, a health-tech and insurance company involved in administering health benefits, had filed its draft red herring prospectus (DRHP) in May 2021 and SEBI had already given its observations and approved the IPO in August 2021.
However, Medi Assist Healthcare Services Ltd is yet to announce the dates of its IPO. The IPO will be entirely an offer for sale by the existing shareholders. The company has decided to go slow with the IPO after the undersubscription of Star Health, which got only 78% subscription despite having the backing of Rakesh Jhunjhunwala.
7 important things to know about the Medi Assist Healthcare Services IPO
1) Medi Assist Healthcare Services Ltd has filed for an IPO with SEBI which comprises entirely of an offer for sale (OFS) of 2,80,28,168 shares or approximately 280.28 lakh shares on offer. There will be no fresh issue component in the issue.
However, since the price band for the stock has not been fixed, the size of the OFS and the value of the issue overall is not known as of now. Medi Assist Healthcare Services Ltd is basically a health technology (health-tech) company based out of Bengaluru and administers the health benefits to the clients of insurance companies as an administrative processing and claim disbursing intermediary.
2) As stated earlier, the entire Medi Assist Healthcare Services IPO will be an offer for sale (OFS) with no fresh issue component. The offer for sale will be for a total of 2,80,28,169 shares or approximately 280.28 lakh shares.
Since it is an offer for sale, there will be no fresh funds coming into the company. There will just be a transfer of ownership from the promoters and the early investors in the company to the public at large.
This will help to improve the free float of the company and also facilitate the listing of the company and eventually help the company arrive at a market driven valuation for the business as a basis for future use of stock as currency.
3) Those selling shares in the offer for sale include Dr Vikram Jit Singh Chatwal, Medi Matter Health Management, Bessemer India Capital Holdings II Ltd, Bessemer Health Capital LLC and Invest Corp PE Fund I.
The selling shareholders are a mix of promoter group and also the early investors in the company including Bessemer, which has been one of the early private equity investors to bet on the company.
4) Since there is no fresh issue of shares, no fresh funds will be infused into the company as a result of the IPO. The entire issue being in the form of an offer sale, will neither be capital dilutive nor will it be EPS dilutive.
However, it will enable the company to list on the bourses and improve its public brand image giving it more visibility in the public mindshare.
5) Bengaluru-based Medi Assist Healthcare Services Ltd is a healthtech and insurtech company. Basically, the company operates in the confluence of healthcare, insurance and administration using technology to the fullest extent.
These companies are better known as TPAs or third party administrators in insurance parlance and are focused on administering health benefits across employers, retail members and public health schemes.
Medi Assist Healthcare Services Ltd manages Rs.7,830 crore of health insurance premiums on an annualized basis.
6) For the period of nine month to December 2020, Medi Assist Healthcare Services Ltd reported a total income of Rs.257.44 crore against Rs.245.16 crore a year ago, managing to grow its profits on a yoy basis amidst the pandemic.
The profit after tax (PAT) of Medi Assist Healthcare Services Ltd stood at Rs.33.09 crore for the same nine months period as compared to Rs.31.04 crore in the corresponding period in the previous year. The company has consistently maintained net profit margins in excess of 12% annually.
7) The IPO of Medi Assist Healthcare Services Ltd will be lead managed by IIFL Securities, Axis Capital, Edelweiss Financial Services and SBI Capital Markets. They will act as the book running lead managers or BRLMs to the issue.
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