Hospital chain GPT Healthcare files DRHP for IPO as profit doubles. Find out more

by 5paisa Research Team Last Updated: Dec 09, 2022 - 12:50 pm 48.8k Views

GPT Healthcare Ltd, which operates mid-sized multispecialty hospitals under the ILS Hospital brand in eastern India, has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India for an initial public offering.

The IPO consists of a fresh issue of shares aggregating to Rs 17.5 crore and an offer for sale of almost three crore shares shares by its investor and promoter, according to the draft red herring prospectus (DRHP).

BanyanTree Growth Capital, a private equity fund, plans to sell up to 2.6 crore shares and GPT Sons Pvt Ltd, the promoter entity, will offload up to 38lakh shares. GPT Sons holds a 67.34% stake in GPT Healthcare and BanyanTree owns 32.64%. BanyanTree plans to sell its entire stake.

As per market sources, the total IPO size could be between Rs 450 crore and Rs 500 crore.

GPT Healthcare plans to use the proceeds from the fresh issue to buy medical equipment amounting to Rs 13.2 crore over the next two years, besides for general corporate purposes.

Dam Capital Advisors Ltd and SBI Capital Market Ltd are the book running lead managers to the IPO.

GPT Healthcare’s business

The company was founded by Dwarika Prasad Tantia and Dr Om Tantia, who has more than four decades of experience as a surgeon and is a specialist in the field of laparoscopic surgery.

It started as an eight-bed hospital at Salt Lake, Kolkata in 2000. It now operates three hospitals under the ILS Hospital brand in West Bengal and one in Tripura with a total capacity of 556 beds.

The hospital chain operates 35 specialties and super-specialties such as internal medicine, diabetology, gastroenterology, orthopaedics and joint replacements, interventional cardiology, neurology, neurosurgery, paediatrics and neonatology.

The company intends to grow the urology, neurology, interventional cardiology and oncology specialties. It also plans to expand its network of hospitals into markets in eastern India and adjacent regions via greenfield and brownfield projects.

GPT Healthcare focuses on developing an asset-light model. It has recently signed an MoU and long-term lease agreement for a hospital with 140 beds in Ranchi at an estimated investment of Rs 50 crore. The Ranchi Hospital is expected to commence operations in 2025. Other locations it is considering to expand are Lucknow, Varanasi, Patna, Guwahati, Cuttack and Raipur.

GPT Healthcare’s financials

The company’s total income increased 15.2% from Rs 216.08 crore in 2019-20 to Rs 248.86 crore in 2020-21, primarily due to growth in income from hospital services, income from pharmacy sales and non-operating income.

Its net profit doubled to Rs 21.09 crore for 2020-21 from Rs 10.96 crore the year before.

The company’s EBITDA margin was 22.14% for 2020-21 compared with 18.53% in 2019-20.

Its net operating profit margin was 8.69%, higher than listed hospital chains such as Apollo Hospitals Enterprise Ltd, Narayana Health Ltd, Max Healthcare Institute Ltd, Fortis Healthcare Ltd and Shalby Ltd, according to a CRISIL report.

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