KIMS IPO : Subscribe or NOT?

The data has been compiled from various sources and might have small difference but overall theme is to subscribe or not — we will focus on that

KIMS IPO– Incorporated in the year 1973, KIMS is one of the largest corporate healthcare groups in Andhra Pradesh and Telangana in terms of patients treated and treatments offered.

Business — The Hyderabad-based hospital chain offers multidisciplinary healthcare services with primary, secondary, and tertiary care across 2-3 tier cities, and an additional quaternary healthcare facility in tier-1 cities.

Region of operation –Main presence in 2 states , Telagana and Andhra Pradesh

Offer purpose — The IPO includes a fresh issue of Rs 200 cr and an Offer For Sale (OFS) of up to 2.35 cr equity shares by the promoters and existing shareholders. This includes roughly 1.6 cr shares by the biggest investor in the company – General Atlantic Singapore KH Pte. for prepayment of borrowings and general purposes

Risks —

Extremely high level of dependency on top 10 doctors

Concentrated region of operation

ARPOB is on the lower side as compared to industry numbers

Strength

Multidisciplinary healthcare services with primary, secondary, and tertiary care across 2-3 tier cities at afforable rates

Better cost operating profile wrt peers due to operational leverage

Strong Balance sheet and operating margins

KIMS has expanded its business by successfully completing 4 significant acquisitions from FY 2017-2018 to FY 2019-2020

Future

Company has plans to expand number of beds and expanding in Chennai and Bengaluru in coming years that will help the growth

As hospital chain becomes more mature, EBITDA margin will improve further

Valuations

Valuations are reasonable and compare well with peers

Should we apply?

People can subscribe for long term and keep on adding on dips & review holdings with each quarter earnings

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