IPO Report-Aster DM Healthcare Ltd 12 th Feb, 2018

Transcription

1 IPO Report-Aster DM Healthcare Ltd 12 th Feb, 2018 Aster DM Healthcare Limited Issue Period 12 Feb Feb, 2018 Security Type Equity Issue Size No. of Shares 5,15,86,145 Price Band Face Value 10 Market Lot 78 Minimum Bid Quantity 78 (Retail) Maximum Bid Quantity 1014 (Retail) Book Running Lead Managers Registrar Listing At RECOMMENDATION ICICI Securities Ltd. Yes Securities Ltd. JM Financial institutional securities ltd. Link Intime India Pvt ltd. BSE & NSE SUBSCRIBE for Listing Gains Incorporated 1987 Aster DM health care limited is a Dubai based provider with health care operations in GCC states (Saudi Arabia, Oman, Qatar, Kuwait and Bahrain) India and the Philippines. The company s Indian operations are headquartered at Kochi, Kerala. Aster DM healthcare operates in multiple segments of healthcare industry including hospitals, clinics and retail Pharmacies and the company provides its medical healthcare services to its patients under the brand Medcare and Access. Healthcare services include 9 hospitals 90 clinics and 206 retail pharmacy in GCC states 10multi-speciality hospitals and 7 clinics in India and 1 clinic in Philippines. 1

2 COMPANY S PROMOTERS Dr. Azad Moopen (Chairman and managing director) He is a gold medalist in Medicine and a post graduate in General Medicine from University of Calicut, Kerala, India and a diploma holder in Tuberculosis and Chest Diseases from Delhi University, Delhi, India. He is responsible for overall business operations and is responsible for setting forth the group strategy and vision. The promoter s currently holds 18,87,06,090 equity shares which is 37% of the total share capital post Issue. ISSUE STRUCTURE Mr.T.J. Wilson (Exicutive director and group head) He holds a bachelor s degree in Commerce from the University of Calicut, Kerala, India. He is also a member of the Institute of Chartered Accountants of India. In the past, he has worked with Koyenco Feeds Private Limited and Parle (Exports) Limited. He is responsible for overseeing the legal, secretarial and governance function, internal audit and large portfolio of new hospital projects. He has been a Director of the Company since April 20, Fresh Issue of Equity Shares up to ` 724 crores + OFS of Equity shares up to ` 256 crores QIB: 50% of the issue NIB: Retail: 15% of the issue 35% of the issue ANCHOR INVESTORS INVESTMENTS Aster DM Healthcare has raised over ` 294 crores from Anchor Investors. The Major Anchor Investors Are:- Sundaram Mutual Fund Karst Peak Asia Master Fund First State Indian Subcontinent Fund POST ISSUE SHAREHOLDING PATTERN Post Issue Shareholding Pattern Promoters Public 37% 63% 2

3 OBJECTS OF THE ISSUE Particulars Repayment / Pre-payment of debt Purchase of medical equipment General Corporate purposes Total Amount ` 564 crore ` 110 crore ` 50 crore ` 724 crore KEY RATIOS Particulars For the year/period ended March 2014 March 2015 March 2016 March 2017 *Upper Price Band Debt-Equity Ratio(x) Current Ratio(x) Price/Earnings Ratio(x)* RoE (Return on Equity) EPS (Earnings Per Share) Book Value Per Share VALUATION Aster DM Healthcare is one of the largest private healthcare service providers which operate in multiple GCC states and an emerging presence in India. On the upper price band of Rs 190 Aster DM Healthcare is available at a P/E ratio of 28.70x of its FY17 earnings which is below the Industry average of 60x. Hence assign SUBSCRIBE for listing gains. OUTLOOK We recommend a SUBSCRIBE for Listing gains rating to the issue for risk taking investors. 3

4 DIVERSIFIED PORTFOLIO OF SERVICE OFFERINGS TO CAPTURE MULTIPLE OPPORTUNITIES Aster has an established presence across multiple geographies, multiple healthcare delivery verticals and serve multiple economic segments. The company provides healthcare services in the United Arab Emirates, Oman, Saudi Arabia, Qatar, Kuwait and Bahrain, which comprise all of the GCC states, in Jordan (which we classify as part of our GCC operations) and in the Indian cities of Kochi, Kolhapur, Kozhikode, Kottakkal, Bengaluru, Vijayawada, Guntur, Wayanad and Hyderabad. Aster s healthcare network serves a diverse range of patients needs and is spread across various geographies. STRONG BRAND EQUITY ACROSS GCC STATES AND INDIA Aster DM Healthcare is one of the largest private healthcare service provider which operate in multiple GCC states & India. The company is well placed to capitalize on the expected growth in healthcare sector in the GCC states due to our early mover advantage, strong brand presence using a targeted strategy of offering different brands to cater to diverse group of customers and existing track record. Aster DM Healthcare operates through their 3 different brands ASTER, MEDCARE & ACCESS which is widely recognized in GCC states by healthcare professionals and patients. Aster & Medcare brands offers affordable healthcare to upper and middle income segment and Access offers healthcare services to lower income segment in GCC states. HY-FY18 Business Segment Classification Pharmacies 25% Hospitals 49% Clinics 26% 4

5 TRACK RECORD OF OPERATING AND FINANCIAL PERFORMANCE The company has grown from 149 operating facilities in 5 countries, including 10 hospitals in FY13 to 323 operating facilities in 9 countries, including 19 hospitals in 1HFY18. Aster DM Healthcare has increased the bed capacity of hospitals from 1,419 beds in FY13 to 4,754 beds in FY17. The company s operational beds increased from 1,309 in FY13 to 3,584 in 1HFY18. The company s ARPOB in the GCC states increased from in FY13 to in FY17 and in 1HFY18 and the company s ARPOB in India increased from 8130 to and during the same period. The number of its clinics in GCC states increased from 41 in FY13 to 90 as of 1HFY18, and the number of retail pharmacies increased from 98 in FY13 to 206 in 1HFY18. FY13-17 Revenue CAGR at 25.28% ARPOB FY13 FY17 CAGR Growth (%) GCC ( ` Per Day) India ( ` Per Day) FY13 FY14 FY15 FY16 FY17 MAJOR HOPITALS IN GCC STATES & INDIA Hospital Location Since Type of Hospital Installed Bed Capacity GCC STATES Medcare Hospital Dubai, UAE Operational 2007 Multi-specialty 63 Al Raffah Hospital Muscat, Oman Operational 2009 Multi-specialty 86 Al Raffah Hospital Sohar, Oman Operational 2010 Multi-specialty 67 Medcare Orthopaedics & Spine Hospital Dubai, UAE Operational 2012 Specialty 33 Aster Hospital Mankhool Dubai, UAE Operational 2015 Multi-specialty 114 Medcare Women and Child Hospital Dubai, UAE Operational 2016 Multi-specialty 101 Medcare Hospital Sharjah, UAE Operational 2017 Multi-specialty 124 Sanad Hospital Riyadh Increased interest to 97% Sep15. Multi-specialty 218 Aster Hospital Doha, Qatar Operational 2017 Multi-specialty 61 INDIA Aster Aadhar Hospital Kolhapur, Maharashtra Acquired 2008 Multi-specialty 175 MIMS Kozhikode Kozhikode, Kerala Acquired 2013 Multi-specialty 678 MIMS Kottakkal Kottakkal, Kerala Acquired 2013 Multi-specialty 229 Aster CMI Bengaluru, Karnataka Operated and managed since 14. Multi-specialty 509 Aster Medcity Kochi, Kerala Operational 2014 Multi-specialty 670 Prime Hospitals Ameerpet Hyderabad, Telangana Acquired 2014 Multi-specialty 158 DM WIMS Wayanad, Kerala Operated and managed Multi-specialty 880 Dr. Ramesh - Guntur Guntur, A.P. Acquired 2016 Multi-specialty 350 Dr. Ramesh - Main Centre Vijaywada, A.P. Acquired 2016 Multi-specialty 184 Dr. Ramesh Labbipet Vijaywada, A.P. Acquired 2016 Multi-specialty 54 5

6 STRENGTHS Diversified revenue sources from hospitals, clinics and pharmacies. Ability to attract and retain high quality medical professionals. Experienced core Management. RISKS & CONCERNS High geographical concentration in GCC countries which can increase risks for the company. Increase in competition from other players can impact the business of the company. The company had suffered losses from Sanad Hospital, Saudi Arabia which had a higher revenue exposure from the government. Higher exposure to foreign exchange fluctuations. INDUSTRY OUTLOOK The UAE had significant healthcare expenditures with a 3.6% share of the GDP in The total healthcare expenditure was USD billion in 2014, growing at a CAGR of 8.0% since The healthcare expenditure can be estimated to reach USD billion in 2016, which is 4.9% of the estimated GDP of the UAE in the same year. In absolute value terms, while the public health expenditure increased at a CAGR of 9.7% between 2008 and 2014, the private health expenditure increased at a lower rate of 4.1%. However, in recent years, the growth in private health expenditure has been increasing. Overall, healthcare expenditure in the KSA has shown continuous growth with the increasing number of inpatient and outpatient visits in private hospitals, increasing per outpatient visit realization in private hospitals (USD 97 per visit in 2010 to USD 113 in 2013), and increasing per capita expenditure on healthcare. It has also been a major focus sector by the Government and this growth is attributed to the numerous new and planned hospital projects by the Government as well as the private sector. Qatar has seen growth rate of population in the recent past (CAGR of 4.4% over ). According to DHA, 98% of Dubai s population had insurance coverage in 2016, while approximately 38% of the KSA population was insured in Mandatory health insurance is also expected to increase private participation in the healthcare industry, with clear reimbursement rates and procedures in place. In this scenario, organized players which have a strong support system and are able to invest in upcoming infrastructure stand to gain by getting better reimbursement rates. While Abu Dhabi already had mandatory health insurance for all residents, all Dubai residents are mandated to be covered by insurance by March COMPARISON WITH LISTED INDUSTRY PEERS Name of the Company Revenue (` Crs) F.V per share RoNW EPS P/E NAV Aster DM Healthcare Apollo Hospitals Fortis Healthcare Narayana Hrudayala Healthcare Global Average

7 SUMMARY STATEMENT OF ASSETS AND LIABILITIES Y/E ( ` Crore) FY-2013 FY-2014 FY-2015 FY-2016 FY-2017 Share Capital Reserves & Surplus Net Worth Minority interest Non Current Liabilities Current Liabilities Total Liabilities Non Current Asset Deffered Tax (Assets) Long Term loans & Advances Other Non current Assets Current Assets Cash & Cash Equivalent Total Assets SUMMARY STATEMENT OF PROFIT AND LOSS Y/E ( ` Crore) FY-2013 FY-2014 FY-2015 FY-2016 FY-2017 Net Sales Growth (%) N/A Employee Expenses Admin & Other Exp Other Expense Total Expenses EBITDA Growth (%) N/A EBITDA Margin (%) 11% 14% 10% 7% 4% Depreciation Interest Other Income PBT Tax Expense Net Profit Growth (%) N/A

8 STATEMENT OF CASH FLOWS Particular ( ` Crore) FY-2013 FY-2014 FY-2015 FY-2016 FY-2017 Net Cash from Operating Activities Net Cash Used in Investing Activities Net Cash Used in Financing Activities HAPPY INVESTING!! Offer Open's on 12 Feb 18 Offer Closes on 15Feb18 Finalization of Allotment 22Feb 18 Unblocking ASBA 22Feb18 Credit to Demat A/c. 22Feb 18 Listing on Stock exchange 26Feb18 The TEAM Dhruv Ajmera ( MSC, E&I ) Amit Tibrewala ( MBA Finance) NISM Series XV- Research Analyst Kailas Shinare (CA) Vinod Parmar ( CS,LLB) Punit Joshi (Bsc) AMFI IRDA Tel No: Id: research@ajmera.co.in AJMERA x-change Disclaimer: The information contained in this report is obtained from reliable company s sources and is directed at market professionals and institutional investors. In no circumstances should it be considered as an offer to sell/buy or, a solicitation of any offers to, buy or sell the securities or commodities mentioned in this report. Ajmera, and/or its affiliates, may or may not have position in securities mentioned in this report. No representation is made that the transactions undertaken based on the information contained in this report will be profitable, or that they will not result in losses. Ajmera Associates Ltd and/or its representatives will not be liable forth recipients investment decision based on this report.for details refer website. 8