On June 15, Krishna Institute of Medical Sciences (KIMS Hospitals) received Rs 955.68 crore from 43 anchor investors, one day before the public offering began.
“The IPO committee of the company in consultation with merchant bankers, have finalised allocation of 1,15,84,060 equity shares to anchor investors at allocation price of Rs 825 per equity share,” said the company in its circular published on exchanges.
Nomura Funds, Stock Mother Fund, Segantii India Mauritius, Goldman Sachs, Zaaba Pan Asia Master Fund, Integrated Core Strategies, Moon Capital, Ghisallo Master Fund, and Societe Generale were among the anchor book’s marquee investors.
Domestic investors included HDFC Trustee, Axis Mutual Fund, ICICI Prudential, Nippon Life India, IDFC Mutual Fund, UTI Mutual Fund, Mirae Mutual Fund, and HDFC Life Insurance Company.
KIMS Hospitals, which is supported by General Atlantic, is one of the leading corporate healthcare organisations in Andhra Pradesh and Telangana in terms of patient volume and services supplied.
On June 16, the business will begin a public offering to raise Rs 2,143.74 crore from consumers, eligible institutional purchasers, and non-institutional investors. The offer price band has been set at Rs 815-825 per equity share.
General Atlantic Singapore KH Pte Ltd, Bhaskara Rao Bollineni, Rajyasri Bollineni, Bolllineni Ramanaiah Memorial Hospital, and other selling stockholders are offering up to 2,35,60,538 equity shares in the IPO.
The net proceeds from the fresh offer will be used to repay certain borrowings (Rs 150 crore) and for general company purposes. The edition will be available till June 18.
About the business
KIMS Ltd is a leading healthcare conglomerate in Andhra Pradesh and Telangana. In tier 2-3 cities, it provides multidisciplinary healthcare services in primary, secondary, and tertiary care. The organisation provides a comprehensive spectrum of healthcare services, including cancer, cardiology, neurosciences, gastroenterology, orthopaedics, renal sciences, and organ transplantation. It manages nine multi-specialty hospitals under the brand name KIMS Hospitals, totaling 3,064 beds, including more than 2,500 operating beds.
Competitive advantages
- One of Andhra Pradesh’s and Telangana’s largest corporate healthcare service providers.
- Doctors who are highly certified and trained, as well as medical support professionals.
- Outstanding operational and financial results.
- A seasoned management team.
Financials
The company generated an average revenue per operating bed (ARPOB) of Rs 20,609 in FY21, with a bed occupancy rate of 78.60 percent and an average duration of stay of 5.53 days. The ARPOB was Rs 39,571 in Tier 1 cities and Rs 11,187 in Tier 2-3 cities. In FY21, cardiac sciences accounted for 17.82 percent of KIMS revenue, neurosciences accounted for 12.55 percent, renal sciences accounted for 9.30 percent, and orthopaedics accounted for 4.64 percent. In fiscal year 2021, revenue from its top two hospitals in Secunderabad and Kondapur (both in Telangana) will account for 64.09 percent of total business. In FY21, the company recorded consolidated revenue of Rs 1,330 crore and profit of Rs 205 crore.
| Amount (in crore) | 31-Dec-20 | 31-Mar-20 | Mar-19 | 31-Mar-18 |
| Total assets | 12,87.4 | 11,95.8 | 11,17.6 | 9,58 |
| Total revenue | 9,77.3 | 11,28.7 | 9,23.8 | 7,00 |
| Total expense | 7,79.3 | 7,57.9 | 9,38.9 | 7,21.3 |
| Profit after tax | 1,46.8 | 1,15.0 | (48.5) | (46.1) |
The corporation intends to expand into markets adjacent to its current key markets, such as Chennai and Bengaluru. Apart from Tamil Nadu and Karnataka, it is also studying the possibility of expanding into central India and Bhubaneswar (Odisha). Additionally, the company is focusing on consolidating current markets by improving clinical skills within existing hospitals and providing additional bed capacity to satisfy growing demand. Recently, the company expanded its hospital network by acquiring hospitals in Ongole in FY17, Vizag and Anantapur in FY19, and Kurnool in FY20 (all in Andhra Pradesh). KIMS has the highest three-year compounded annual growth rate (CAGR) among the major hospital players. The corporation is taking steps to increase operational efficiencies. Additionally, it is investing in digital health and technology. The company’s growth is fueled by several qualitative factors, including a track record of strong operational and financial performance, a disciplined acquisition strategy that results in successful inorganic growth, and the ability to attract, train, and retain high-quality physicians, consultants, and medical support staff. Given the foregoing, we feel that the company will continue to grow at a healthy rate, and therefore that you can invest for a listing gain.
Bhoi Smrutirekha Dharanidhar