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23 December 2023

KK Shah Hospitals IPO: Nurturing Healthcare, Bridging Hope

Introduction:

KK Shah Hospitals IPO has emerged as a beacon in the financial landscape, presenting a fixed price issue of Rs 8.78 crores, solely comprising a fresh issue of 19.5 lakh shares. The IPO bidding window opened on October 27, 2023, and gracefully concluded on October 31, 2023. The allotment process was aptly finalized on Friday, November 3, 2023, paving the way for listing on BSE SME on November 6, 2023.

Financial Rundown:

Priced at ₹45 per share, the IPO showcased a minimum lot size of 3000 shares, necessitating a minimum retail investment of ₹135,000. For High Net Worth Individuals (HNIs), the minimum lot size was 2 lots (6,000 shares), amounting to ₹270,000.
As of December 20, 2023, KK Shah Hospitals Ltd (544013) was trading at ₹72.32, reflecting a 9.21% decrease. The opening and closing figures stood at ₹79.66 and ₹79.66, respectively. The 52-week range oscillated between ₹52.50 (Nov 10, 2023) and ₹89.80 (Dec 04, 2023).

Key IPO Metrics:

- IPO duration: October 27, 2023, to October 31, 2023
- Listing Date: November 6, 2023
- Face Value: ₹10 per share
- Issue Price: ₹45 per share
- Lot Size: 3000 Shares
- Total Issue Size: 1,950,000 shares, aggregating up to ₹8.78 Cr
- Fresh Issue: 1,950,000 shares, aggregating up to ₹8.78 Cr
- Issue Type: Fixed Price Issue IPO
- Listing At: SME, BSE

Equity Landscape:

Pre-issue, KK Shah Hospitals had 4,858,542 shares. Post the IPO, this figure increased to 6,808,542 shares.

IPO Reservation Dynamics:

The IPO allocated 47.38% to Non-Institutional Investors (NII), 47.38% to Retail Individual Investors (RII), and 5.23% to the Market Maker (102,000 shares). Notably, there were no shares offered to Anchor Investors.

IPO Timeline Highlights:

- IPO Open Date: Friday, October 27, 2023
- IPO Close Date: Tuesday, October 31, 2023
- Basis of Allotment: Friday, November 3, 2023
- Initiation of Refunds: Monday, November 6, 2023
- Credit of Shares to Demat: Monday, November 6, 2023
- Listing Date: Monday, November 6, 2023
- Cut-off time for UPI mandate confirmation: 5 PM on October 31, 2023

Lot Size Landscape:

Investors had the flexibility to bid for a minimum of 3000 shares and in multiples thereof. The table below outlines the investment parameters for retail investors and HNIs:

Application	Lots	Shares	Amount
Retail (Min)	1	3000	₹135,000
Retail (Max)	1	3000	₹135,000
HNI (Min)	2	6,000	₹270,000

Promoter Holdings:

Dr. Amit Shah and Dr. Kirti Kumar Shah are the Promoters of KK Shah Hospitals. Pre-issue, they held 100% of shares, which decreased to 71.36% post the issue.

Company Profile:

Incorporated in 2022, KK Shah Hospitals Limited, formerly known as Jeevan Parv Healthcare Limited, extends inpatient and outpatient healthcare services through its hospital in Ratlam, Madhya Pradesh. The journey traces back to 1976 when Dr. Kirti Kumar Shah initiated a clinic, subsequently expanding to a nursing home in 1991, and finally, a hospital named Shah Hospital.
The hospital boasts over 26 beds for in-patient and out-patient treatment, equipped with diagnostic devices including CT scans, DEXA scans, BMD, sonography, and X-ray machines. Services encompass over 75-80 surgeries monthly and healthcare provisions to approximately 2,200-2,350 patients per month.
The company is a member of the Biomedical Waste Management System and holds National Accreditation Board for Hospitals and Healthcare Providers (NABH) accreditation.

Financial Performance Overview:

As of June 30, 2023:

- Assets: ₹573.32 Lakhs
- Revenue: ₹162.21 Lakhs
- Profit After Tax: ₹9.53 Lakhs
- Net Worth: ₹518.74 Lakhs
- Reserves and Surplus: ₹32.89 Lakhs

Key Performance Indicators:

- P/E (x): 100
- Post P/E (x): 8.04
- Market Cap: ₹30.64 Crores
- ROE: 8.56%
- ROCE: 5.72%
- EPS (Rs): 0.45
- RoNW: 4.28%

Objects of the Issue:

The net proceeds from the issue are allocated towards:
1. Purchase of medical equipment.
2. General corporate purposes.

Expert Analysis:

The issue seems fully priced, and its small equity post-IPO hints at a longer gestation for migration to the mainboard.

IPO Subscription Status:

As of October 31, 2023, the KK Shah Hospitals IPO was subscribed 13.58 times. Retail subscription stood at 9.41 times, while the Non-Institutional Investors (NII) and Other categories were subscribed 17.75 times and 13.58 times, respectively. The total number of applications reached 3,162, reflecting a subscription of 10.27 times.

Note: All financial figures are in INR (Indian Rupees), and market-related data is as of December 20, 2023.

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