The offer comprises a fresh issue of Rs 200 crore and offer for sale (OFS) of up to 23,56,0358 crore shares (Rs 1,944 crore at the upper price band). The proceeds from fresh sales will be used for the repayment of the debt of the company.
The IPO includes a reservation of up to Rs 20 crore worth of shares for employees.
KIMS is one of the largest hospital chains in South India, with operations in Andhra Pradesh and Telangana. The company operates nine multi-specialty hospitals with an aggregate capacity of 3,064 beds, with over 2,500 operational beds. The number of KIMs’ beds are 2.2 times that of the second largest hospital in Andhra Pradesh and Telangana.
“This is a very good time to launch an IPO in the hospital sector, given we have seen a one way-rally in several listed hospital stocks. We have a positive outlook for the KIMS-IPO,” said Yash Gupta, Equity Research Associate at Angel Broking.
The company’s flagship hospital is at Secunderabad. It is among the largest private hospitals in India at a single location, with a capacity of 1,000 beds. The company has in recent years expanded its hospital network through acquisitions of hospitals in Ongole in FY17, Vizag and Anantapur in FY19, and Kurnool in FY20.
In FY21, the company had an average revenue per operating bed (ARPOB) of Rs 20,609, a bed occupancy rate of 78.60 per cent, and an average length of stay of 5.53 days.
Average revenue per occupied bed (ARPOB) at Tier 1 cities stood at Rs 39,571 while it was Rs 11,187 in tier 2-3 cities.
In FY21, 17.82 per cent of KIM’s revenues came from cardiac sciences, 12.55 per cent from neurosciences, 9.30 per cent from renal sciences, 4.64 epr cent from orthopaedics, 5.25 per cent from gastric sciences, 5.71 per cent from oncology and 6.11 per cent from mother & child care.
Top 10 doctors contributed 21.80 per cent of its total income while top 25 contributed 36.10 per cent of sales.
In its KIMS IPO note, Axis Securities suggest the hospital chain experienced negative growth of 3.96 per cent for their outpatient volume from 2019 to 2021, mainly due to Covid related lockdown, quarantines, and other travel-related restrictions that resulted in fewer people traveling to its hospitals to seek outpatient treatment.
The negative outpatient volume CAGR was offset by 2.31 per cent growth of inpatient volume, which resulted in growth of total income, as a large proportion of their inpatients during the Covid-19 pandemic were critical and complex cases, with longer stays.
