ASTER DM HEALTHCARE LIMITED IPO Price Band : ` 180 `190. our recommendation avoid

Transcription

1 ASTER DM HEALTHCARE LIMITED IPO Price Band : ` 180 `190 our recommendation avoid

2 THE OFFER Issue Open : 12 Feb 2018 to 15 Feb 2018»» Issue Type: Book Built Issue IPO»» Issue Size: Fresh Issue aggregating up to ` 725 Cr Offer for Sale of 13,428,251 Equity Shares»» Face Value: ` 10 Per Equity Share»» Issue Price: ` ` 190 Per Equity Share»» Market Lot: 78 Shares»» Minimum Order Quantity: 78 Shares»» Listing At: NSE, BSE

3 CAPITAL STRUCTURE The share capital of Company, is set forth below:- (Amount in ` except share data) Authorized Share Capital :- 550,000,000 Equity Aggregate value 5,500,000,000 66,200,000 Preference Aggregate value 662,000,000 Issued, subscribed and paid up capital before the Issue :- 467,069,451 Equity Aggregate value 4,670,694,510 Present Issue:- Fresh Issue aggregating up to `725 Cr Offer for Sale of 13,428,251 Equity Shares

4 OBJECT OF THE OFFER The Offer comprises the Fresh Issue and the Offer for Sale. Company will not receive any proceeds from the Offer for Sale. Company proposes to utilize the Net Proceeds from the Fresh Issue towards funding the following objects: Repayment and/or pre-payment of debt; Purchase of medical equipment; and General corporate purposes. In addition, Company expects to receive the benefits of listing of the Equity Shares on the Stock Exchanges and enhancement of Company s brand name and creation of a public market for Equity Shares in India.

5 COMPANY OVERVIEW Aster DM Healthcare is a healthcare service provider operating in multiple segments of the healthcare industry, including hospitals, clinics and retail pharmacies and provides healthcare services to patients across economic segments in several GCC countries through its various brands, such as Aster, Medicare and Access. It mainly operates in GCC countries comprising the United Arab Emirates, Oman, Saudi Arabia, Qatar, Kuwait and Bahrain. In India, the hospitals are located in Kochi, Kolhapur, Kozhikode, Kottakkal, Bangalore, Vijayawada, Guntur, Wayanad and Hyderabad. The GCC operations are headquartered in Dubai, UAE and the Indian operations are headquartered in Kochi, Kerala.

6 Continue The company generates 84% of the revenue from the GCC countries and only 16% is generated from India. As on September 30, 2017, it had 323 operating facilities, including 19 hospitals with a total of 4,754 installed beds as against 149 operating facilities, including 10 hospitals with a total of 1,419 installed beds as on March 31, 2013.

7 ROAD MAP AHEAD Company objectives are to expand their market share and aim to accomplish this through the following strategies: Continue to grow within existing centers. Increase presence by way of Greenfield expansions. Pursue inorganic growth opportunities to expand into newer service offerings or new markets. Capitalize on mandatory health insurance in GCC. Implementation of initiatives to improve existing operational efficiencies and profitability.

8 STRENGTHS Long standing presence across GCC states and India with strong brand equity. Well diversified portfolio of service offerings to leverage multiple market opportunities. Provision of high quality healthcare service. Ability to attract and retain high quality medical professionals. Ability to identify, adapt to and capitalize on market developments, conditions, trends and opportunities.

9 FINANCIAL PERFORMANCE Total Revenues stood `3141.3cr, ` cr, ` cr and ` 3899cr, in six months period ended September 30, 2017, Fiscal 2017, Fiscal 2016 and Fiscal 2015 respectively. PBT was ` (66.1)cr, ` 288.5cr, ` 37.6cr and ` 306.2cr, in six months period ended September 30, 2017, Fiscal 2017, Fiscal 2016 and Fiscal 2015 respectively. PAT was ` 82.7cr, ` 266.7cr, ` 8.2cr and ` 272.1cr, in six months period ended September 30, 2017, Fiscal 2017, Fiscal 2016 and Fiscal 2015 respectively.

10 SNAPSHOT - CONSOLIDATED

11 VALUATION OF PEER GROUP COMPANIES All financials are on a consolidated basis for the financial year ending March 31, 2017.

12 RISK FOR THE BUSINESS Companies ownership structure in most of the GCC states is subject to risks associated with foreign ownership restrictions and the shareholder arrangements with local shareholders might be violative of the local laws of the jurisdictions. Certain licenses required to operate businesses in the GCC may be held to contravene legal requirements. Companies growth strategy depends significantly on the construction or development of hospitals, clinics and standalone retail pharmacies which may be subject to delay and cost overruns

13 Continue The prices of prescription and generic pharmaceutical products are regulated by the governments of India and various GCC states and operating margins may be adversely affected by initiatives to reduce prices for end consumers. Company dependent on third-party suppliers and subcontractors. Company have purchased, and will continue to purchase, medical equipment from foreign manufacturers and suppliers. Hence, may face foreign exchange risks which could have a material adverse effect on cash flows, revenues and financial condition.

14 VALUATION Company s Revenue is highly concentrated in the GCC states, Its growth strategy depends significantly on the construction or development of hospitals clinic and standalone retail pharmacies, which may be subject to delay and higher cost thereby decline in company s margins going forward. Also, Higher attrition of reputed doctors can have an impact on the financials. Moreover, looking at the financials of Aster,though the business looks attractive & also Government focus on health sector in the current budget sounds positive for Aster but losses in H1FY18 with weak financial performance in FY17 & high valuation at current level, we recommend to Avoid the issue.

15 DISCLAIMERS This Research Report (hereinafter called report) has been prepared and presented by RUDRA SHARES & STOCK BROKERS LIMITED, which does not constitute any offer or advice to sell or does solicitation to buy any securities. The information presented in this report, are for the intended recipients only. Further, the intended recipients are advised to exercise restraint in placing any dependence on this report, as the sender, Rudra Shares & Stock Brokers Limited, neither guarantees the accuracy of any information contained herein nor assumes any responsibility in relation to losses arising from the errors of fact, opinion or the dependence placed on the same. Despite the information in this document has been previewed on the basis of publicly available information, internal data, personal views of the research analyst(s)and other reliable sources, believed to be true, we do not represent it as accurate, complete or exhaustive. It should not be relied on as such, as this document is for general guidance only. Besides this, the research analyst(s) are bound by stringent internal regulations and legal and statutory requirements of the Securities and Exchange Board of India( SEBI) and the analysts' compensation was, is, or will be not directly or indirectly related with the other companies and/or entities of Rudra Shares & Stock Brokers Ltd and have no bearing whatsoever on any recommendation, that they have given in the research report Rudra Shares & Stock Brokers Ltd or any of its affiliates/group companies shall not be in any way responsible for any such loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Rudra Shares & Stock Brokers Ltd has not independently verified all the information, which has been obtained by the company for analysis purpose, from publicly available media or other sources believed to be reliable. Accordingly, we neither testify nor make any representation or warranty, express or implied, of the accuracy, contents or data contained within this document. Rudra Share & Stock Brokers Ltd and its affiliates are engaged in investment advisory, stock broking, retail & HNI and other financial services. Details of affiliates are available on our website i.e. We hereby declare, that the information herein may change any time due to the volatile market conditions, therefore, it is advised to use own discretion and judgment while entering into any transactions, whatsoever. Individuals employed as research analyst by Rudra Shares & Stock Brokers Ltd or their associates are not allowed to deal or trade in securities, within thirty days before and five days after the publication of a research report as prescribed under SEBI Research Analyst Regulations. Subject to the restrictions mentioned in above paragraph, we and our affiliates, officers, directors, employees and their relative may: (a) from time to time, have long or short positions acting as a principal in, and buy or sell the securities or derivatives thereof, of Company mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or profits.

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