Jupiter Life Line Hospitals IPO GMP (Grey Market Premium)

Jupiter Life Line Hospitals IPO worth ₹869.08 crore comprises of an offer for sale and also of a fresh issue of shares. The offer for sale (OFS) component is by the promoters and early shareholders of the company. Here it must be noted that while the fresh issue component infuses fresh funds into the company, it also is EPS dilutive and equity dilutive. On the other hand, the OFS is just a transfer of shares so there is no fresh infusion of funds, but it also does not dilute the equity. The issue has been priced in the band of ₹695 to ₹735 per share and the IPO allotment price will be discovered post the book building of shares being completed during the IPO process. For our analysis, the upper end of the band is assumed.

Jupiter Life Line Hospitals IPO details

Let us now look at the details of the issue of Jupiter Life Line Hospitals IPO. The offer for sale of the company IPO will entail the issue of 44,50,000 shares which at the upper end of the price band of ₹735 per share would result in an offer for sale component of ₹327.08 crore. The fresh issue component of the company IPO will entail the issue of 73,74,163 shares which at the upper end of the price band of ₹735 would result a fresh issue component of ₹542 crore. Therefore, the overall size of the company IPO will entail the issue of 1,18,24,163 shares which at the upper end of the price band of ₹735 per share would result in the total issue size of ₹869.08 crore.

The issue opens for subscription on 06th September 2023 and closes for subscription on 08th September 2023 (both days inclusive). The basis of allotment will be finalized on 13th September 2023 and the refunds will be initiated on 14th September 2023. In addition, the demat credits are expected to happen on 15th September 2023 and the stock is scheduled to list on 18th September 2023 on the NSE and the BSE.

Understanding Jupiter Life Line Hospitals IPO GMP

The grey market price (GMP) trading normally starts about 4-5 days prior to IPO opening and continues till the listing date. In the case of Jupiter Life Line Hospitals Ltd, we already have GMP data for the last 3 days, which should give a reasonable picture of the likely listing performance.

There are 2 factors that impact the GMP. Firstly, the market conditions have a deep impact on the GMP, which includes the levels of the Nifty and Sensex as well as the general IPO market and macro conditions. Secondly, the extent of subscription for the IPO across the retail and the QIB segments also has a deep impact on the GMP as it is indicative of investor interest in the stock. Generally, strong QIB subscription is a trigger for a spike in GMP.

There is one small point to remember here. The GMP is not an official price point, just a popular informal price point. However, in most cases, it has been observed to be a good informal gauge of demand and supply for the IPO. Hence it does give a broad idea of how the listing is likely to be and how the post-listing performance of the stock would be.

GMP tends to be a good mirror of the real stock story. More than the actual price, it is the GMP trend over time that gives insights about which direction the wind is blowing.

Jupiter Life Line Hospitals IPO GMP

Here is a quick GMP summary for Jupiter Life Line Hospitals IPO for which the data is available.

In the above case, the GMP trend shows that the grey market premium has opened at around ₹200, but has since moved up to ₹230 per share. However, it must be remembered that initially the stock was trading in the grey market without the price band for the IPO being announced. However, the GMP level is still indicative of strong traction for the IPO grey market price. Of course, we have to await for the actual subscription numbers to flow in when the issue opens for subscription on 06th September 2023, as that would have a very significant impact on the GMP. In the past, stocks which got oversubscribed in the IPO also saw a very robust positive shift in the grey market pricing. For a start, Jupiter Life Line Hospitals Ltd has shown very strong traction in the grey market.

If you consider the upper end of the price band of Jupiter Life Line Hospitals Ltd at ₹735 as the indicative price, then the likely listing price is being signalled at around ₹950 per share as of the GMP indicator on 03rd September 2023. One data point to track will be the subscription update on the stock as that would chart the GMP course from here. As mentioned, the institutional QIB subscription is a key trigger for the GMP pricing.

The GMP of ₹215 on a likely upper band pricing of ₹735 indicates a listing premium of a very healthy 29.25% for Jupiter Life Line Hospitals Ltd over the listing price. That pre-supposes a listing price of approximately ₹950 per share, when Jupiter Life Line Hospitals Ltd lists on 18th September 2023. Of course, these are approximations, so you must keep a margin of safety. However, from here on, a lot will depend on the GMP sustaining over the next few days after the issue opens, as well as the subscription flow into the company IPO.

GMP (grey market price) is an important indicator, albeit informal, of likely listing price. One cannot take this price at face value However, the GMP tends to be quite dynamic and changes direction with the flow of news and events. Investors must note here that this is just an informal indication and has no official acceptance. The best thing one can do with the GMP is to observe the trend closely as that gives the best hints on listing status. Focus on the time series trend than on numbers.

Brief on Jupiter Life Line Hospitals Ltd business model

Jupiter Life Line Hospitals Ltd was incorporated in the year 2007 as a multi-specialty tertiary and quaternary healthcare provider. It is quite strong in the MMRDA and Thane districts and is also present in Pune and Indore. It currently operates 3 hospitals under the "Jupiter" brand located at Thane (near Mumbai), Pune, and Indore. It has total operational bed capacity of 1,194 beds and it is currently in the process of developing a multi-specialty hospital in Dombivli, near Kalyan. The multi-specialty hospital at Dombivli will have 500 beds and has just commenced construction earlier this year. It also has over 1,300 doctors empanelled in its staff, which includes specialists, physicians, and surgeons across different medical faculties. The Jupiter Life Line Hospitals located at Thane and Indore are among the few to offer very advanced and sophisticated neuro-rehabilitation services. This is done through the use of dedicated robotic and computer-assisted neuro-rehabilitation techniques that are not easily available in India. All the hospitals are currently certified by the National Accreditation Board for Hospitals & Healthcare Providers (NABH) and are also accredited for medical testing by the NABL.

The company's offers inpatient and outpatient treatment across its major hospitals located at Thane, Pune, and Indore. Jupiter Life Line Hospitals is equipped with over 30 specialized treatments including bariatric surgery, dermatology, cardiology, gastroenterology, haematology, neurology, gynaecology, obstetrics, rheumatology, pain care, chest medicine, ENT, infectious diseases, oncology, mental health, orthopaedics, robotic knee replacement, dental care, endocrinology, internal medicine, nephrology, urology, and paediatrics. Over the years, Jupiter Life Line Hospitals Ltd has received various accolades and awards across various specializations. The hospital provides specialized care to patients, including after care as well as it offers specialized treatment facilities for international patients.

The proceeds of the fresh issue portion will be used to repay / prepay outstanding loans availed by Jupiter Life Line Hospitals Ltd and its material subsidiary. A small part of the funds raised will also be used for general corporate purposes. The IPO of Jupiter Life Line Hospitals Ltd will be ICICI Securities Ltd, Nuvama Wealth Management Ltd and JM Financial Ltd. KFIN Technologies Ltd (formerly Karvy Computershare Ltd) will be the registrar to the issue.