An additional 85.57 lakh equity shares are being offered for sale by 19 selling shareholders, including promoters Prabhat Agrawal, OrbiMed Asia III Mauritius, and Prem Sethi, for a total of Rs 1,000 crore.

OrbiMed Asia III Mauritius, a subsidiary of the American healthcare-focused investment group OrbiMed, owns 58.70 percent of the company’s stock, while Prabhat Agrawal and Prem Sethi, respectively, possess 11.38 percent and 6.46 percent.

The second largest stakeholder is the Prasid Uno Family Trust, which holds a 20.04 percent ownership in the company through the trusteeship of Surbhi Singh and Universal Trustee.

The Mumbai-based firm might potentially raise up to Rs 200 crore through a private placement, preferential allocation, or rights issue before submitting the red herring prospectus to the ROC.

The primary uses for the Rs 123.7 crore in debt repayment and the Rs 600 crore in long-term working capital requirements would be funded by the net proceeds from the fresh issue. Acquisitions and other forms of inorganic expansion, as well as ordinary company expenses, will consume the remaining money.

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Entero Healthcare, formed in 2018 by Prabhat Agrawal and Prem Sethi with backing from OrbiMed, reports an operating income of Rs 2,522.07 crore in FY23 and positions itself as one of the top three healthcare products distributors in India based on revenue in FY22.

The distributor serves retail pharmacies and hospitals across India through its 73 distribution centers and its IT network. More than 81,400 retail and more than 3,400 hospital customers were served in fiscal 2023, a significant increase over the 64,200 retail and 2,500 hospital customers served in FY22.

In addition, it has supply agreements with more than 1,900 healthcare product manufacturers, giving it access to more than 64,500 product SKUs.

According to its historical fiscal reports, Entero Healthcare is a loss-making organization, with a net loss of Rs 11.1 crore for the year ended March FY23, decreasing from a loss of Rs 29.44 crore, despite a 31 percent year-over-year increase in revenues to Rs 3,300 crore.

The issue’s merchant bankers are ICICI Securities, DAM Capital Advisors, Jefferies India, J.M. Financial, and SBI Capital Markets.

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The post Entero Healthcare Solutions files for IPO, fresh issue component at Rs 1,000 crore appeared first on Republic Aeon.

If strong initial public offering (IPO) subscription numbers and a robust business model with stable asset quality were the primary reasons for bullishness up until last week, the equity market correction is the primary reason for this transition, according to experts.

In more than three and a half weeks, particularly since July 20 when Nifty reached a record high of 19,992, the index has retraced approximately 3 percent, and analysts predict the market consolidation to continue. In the future weeks, the runaway rally since the end of March is unlikely to continue.

On the grey market, SBFC consistently traded at a 70 percent premium until the beginning of this week, when the premium fell to 40-45 percent over the upper price band, analysts said under the condition of anonymity. The grey market is an unofficial market where IPO shares are traded prior to listing.

The Rs 1,025 crore IPO was oversubscribed 70.16 times from August 3-7, with qualified institutional buyers (QIBs) purchasing 192.89 times the allotted quota, high net worth individuals 49.09 times, retail 10.99 times, and employees 5.87 times their allotted portion.

In light of the subdued market sentiment, Prashanth Tapse, Research Analyst and Senior Vice President of Research at Mehta Equities, expects a listing gain of 35 to 40 percent over the final IPO price, as opposed to the 65 to 70 percent previously anticipated.

‘Listing gain justified’

He believes that the present listing gain is warranted based on the company’s attractive IPO valuations, strong anchor book, and impressive financial track record, followed by a business model with a strong emphasis on under-served and under-banked customers, which affords the company the opportunity to receive a premium listing.

Astha Jain, a senior research analyst at Hem Securities, also anticipates that SBFC will list at a 40 percent premium to its IPO price.

The professionally managed NBFC, with a primary focus on the MSME loans segment (which contributes over 80% of total revenue) and gold loans (17% of total revenue), saw assets under management grow at a CAGR of 44% during FY19-FY23, while disbursements grew at a CAGR of 40% over the same period.

“Its balance sheet has steadily improved, with its net worth reaching Rs 1,727.27 billion as of March 2023, an increase of 34 percent over March 2022.

Additionally, a stable credit history, risk management policies, and brand equity have enabled it to access borrowings at competitive rates, with an average cost of borrowing of 8.22 percent for FY23 compared to 7.65 percent for FY22,” SBI Securities said.

With a presence in 120 cities and 152 branches in India, the company emphasises on loans with ticket sizes ranging from Rs 5 lakh to Rs 30 lakh, which comprised over 87 percent of its total AUM in FY23.

With direct customer sourcing and strong relationships, the company sustains gross non-performing assets (NPAs) and net NPAs ratios of 2.43 percent and 1.41 percent in FY23 compared to 2.7 percent and 1.6 percent, respectively, in FY22.

SBFC Finance reported a net profit of Rs 150 crore for the year FY23, up 132% from the previous year, and net interest income increased by 49% to Rs 378.9 crore during the same period.

The NBFC is supported by the private equity firm Clermont Group and the investment banking firm Arpwood Group. Its public offering consists of a fresh issuance of shares worth Rs 600 crore and an offer to sell shares worth Rs 425 crore by entities within the Arpwood Group. The offer price range was between Rs 54 and Rs 57 per share.

The proceeds from the new issue will be used to increase the company’s capital base in order to satisfy its future capital needs for business and asset expansion.

Moneypoise.com’s investing specialists give their own advise and opinions on investments; these do not reflect the views of the website or its administration. Moneypoise.com advises people to speak with experts before making any financial commitments.

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Investors responded well to the Rs 687-crore public offering, subscribing 36.16 times from July 26-28. The offer received strong backing from investors, with qualified institutional investors purchasing 85.10 times their quota and high net worth people bidding 37.22 times theirs and regular investors bidding 8.34 times theirs.

“Following a strong subscription to the issue, Yatharth Hospital is likely to make a decent listing on the bourses on Monday,” said Prathamesh Masdekar, research analyst at StoxBox.

As a result of the company’s concentrated presence in the NCR region, its varied specialisation and payer mix, and the positive sectors tailwinds, he anticipates that the share price will list at around Rs 300, a premium of around 20% over the issue price.

At the end of FY23, the Noida-based multi-care hospital chain had 1,405 beds with 609 doctors, up from 864 beds in FY21 (a CAGR of 27.5%). This was due to the addition of three super speciality hospitals in Delhi NCR and one multi-specialty hospital in Madhya Pradesh.

The operational and financial success of Yatharth Hospital has been consistent throughout the past few years. For the fiscal year ending in March of FY23, profits increased by 49% to Rs 65.8 crore, revenues increased by 31% to Rs 520.3 crore, and EBITDA increased by 21% to Rs 133.8 crore. However, margins shrank from 27.64% to 25.76%.

During the same time period, the company’s income per OPD patient rose from Rs 1,669.22 to Rs 2,074.01.

On the back of reasonable ask valuations and healthy margins when compared to peers, Astha Jain, senior research analyst at Hem Securities, and Prashanth Tapse, analyst and senior VP of research at Mehta Equities, both expect a healthy 20-25 percent listing gains for Yatharth Hospital. Analysts’ optimism is fueled in part by Yatharth’s ambitions for future growth that include expanding into the medical tourism market.

Tapse thinks that following the IPO, Yatharth’s bottom line would grow even more because the company will no longer have any debt.

A total of Rs 490 crore was raised in a new issue, while another Rs 196.55 crore was raised through an offer for sale by the promoters.

The company plans to invest the proceeds from the new issuance on debt reduction, hospital capital improvements, and inorganic expansion.

The post Will Yatharth Hospital debut with decent double-digit premium on August 7? appeared first on Republic Aeon.

Further bolstering mood in the primary market was the robust equities market circumstances brought on by FII inflow.

Qualified institutional buyers (QIB) led the way in the 90.36 times oversubscribed IPO of Netweb Technologies that took place on July 17-19. QIBs have shown the highest level of participation to date, purchasing 228.91 times the allotment.

Employees subscribed at a rate of 53.13 times, retail investors at 19.15 times, and high-net-worth people at 81.81 times.

We anticipate a robust listing of the issue on the bourses tomorrow because the IPO for Netweb Technologies was 90 times oversubscribed. Dhruv Mudaraddi, a research analyst at StoxBox, predicted a premium of 70 percent or more when the shares were listed compared to the issue price of Rs 500 per share.

The company’s laser-like concentration on the high-end computing solutions (HCS) market, which has substantial barriers to entry, has undoubtedly contributed to the enthusiastic response. The strong response can also be attributed to the company’s investment in R&D to improve its product lineup and its expansion into existing market niches.

In addition, the company’s revenue has increased by over 3 times and its profit has increased by nearly 6 times between FY21 and FY23, all while maintaining an ever-improving margin profile.The organisation has a stable clientele consisting of well-known names from several industries. Over time, it has attracted customers from a wider range of industries, including the IT and IT-enabled service industries, the media and entertainment industry, the BFSI sector, national data centres, and government agencies.

It has also branched out into new product lines, including network switches and 5G ORAN equipment, both of which are essential to the operation of data centres for enterprise IT and telecommunications networks in order to support the rollout of 5G services.

Analysts estimated that the grey market premium for Netweb IPO shares was between 75% and 80% due to the high demand for the offering. IPO shares can be bought and sold in the grey market, an unofficial market, before the listing is made public.

To estimate a realistic asking price, most investors examine premiums in the grey market.

According to Swastika Investmart equity research analyst Anubhuti Mishra, “the grey market premium suggests that the listing price could be around Rs 894,” which is a 78% premium over the IPO price of Rs 500 per share.

She continued by explaining that the fact that Netweb offers premier IT services in India merits the company a higher price tag. The firm’s order book has grown substantially, from Rs 48.56 crore in FY21 to Rs 90.2 crore in FY23.

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She thinks Netweb Technologies is positioned to do well as India’s high-end computer market expands.

Hem Securities’ Senior Research Analyst Astha Jain is similarly optimistic about Netweb’s offering, predicting a strong performance at an 85% premium to the issue price.

Just last week, Netweb Technologies completed a public issue that brought in Rs 631 crore. Each share was offered between 475 and 500 rupees.

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The post Netweb Technologies IPO: Is an impressive debut on the cards for June 27? appeared first on Republic Aeon.

The analysts also cite reasonable valuations, excellent financial performance with rising asset quality, and robust growth prospects in the small finance bank business as further factors for the anticipated favourable listing price. A majority of them anticipate a 60% listing premium over the Rs. 25 issue price.

Utkarsh Small Finance Bank’s initial public offering (IPO) of 500 million rupees was subscribed for 101.91 times during the period of July 12-14, indicating strong interest from investors. This is the second public offering of the year, and it has already received more than 100 times as many subscriptions as Ideaforge Technology did.

Qualified institutional purchasers supported the offer to the fullest extent, bidding 124.85 times the quota. The share set aside for employees was booked 16.58 times, while the portion earmarked for high net worth individuals and retail investors was booked 81.64 times and 72.11 times, respectively.

Utkarsh Small Finance Bank is likely to list for roughly Rs 40, or 60% more than its initial public offering price of Rs 25 per share. According to Anubhuti Mishra, equities research analyst at Swastika Investmart, “this is based on the current grey market premium, which is supported by the strong response this IPO received.”

Analysts also reported a significant 60 percent premium on the grey market for the tiny finance bank. IPO shares can be purchased and sold on the grey market, an unofficial trading venue, up until the listing.

The company has a proven track record of expansion, and its financial results have been trending upward in recent years. Because of its emphasis on marginalised populations, Utkarsh SFB is ideally positioned to reap the rewards of the SFB industry’s expansion, as argued by Anubhuti Mishra.

A senior research analyst at Hem Securities and the head of research at Arihant Capital Markets, both named Jain, agree that Utkarsh Small Finance Bank will list at a premium of 60% over its IPO price.

“The bank is well-versed in the microfinance sector and is present in both largely rural and somewhat urban areas. “The bank has been able to post respectable financial results thanks to its expanding deposit base, which has been mostly comprised of retail deposits, and its diverse distribution network, which provides enough potential for cross-selling.

Compared to its competitors Ujjivan Small Finance Bank (2x), AU Small Finance Bank (6.28x), Equitas Small Finance Bank (2.7x), and CreditAccess Grameen (3.9x), the stock is currently trading at a price-to-book value (P/BV) of 1.1x with a market capitalization of Rs 2,739.8 crore.

According to Jehan Bhadha and Archi Jain of Nirmal Bang: “Utkarsh is favourably placed with presence in low ticket segments having strong industry tailwinds.”

Utkarsh has successfully de-risked its business model by lowering its exposure to the unsecured micro banking segment from 82% in FY21 to 66% in FY23. Experts anticipate this trend will carry on.

Utkarsh’s performance during FY21–FY23 was superior to those of its competitors in terms of loan growth, return ratios, and asset quality. As the microfinance business emerges from a severe crisis in 2020-22, with most of the bad loans having been weeded out of the system, Nirmal Bang analysts anticipate growth and robust profitability for the sector and for Utkarsh.

Utkarsh’s net interest income surged by 44% year-on-year to Rs 1,529 crore in the fiscal year ending in March FY23, while profit jumped by 558% to Rs 405 crore and assets expanded by 27% to Rs 19,117.5 crore.

As of March 2023, Utkarsh Small Finance Bank had a presence in 26 States and Union Territories across India, with 830 banking outlets and 15,424 employees. The bank’s gross loan portfolio grew at a CAGR of 34% between FY18 and FY23, and it stood at 13,957 crore.

The company’s deposits increased at a CAGR of 44% between FY18–FY23, reaching Rs 13,710 crore by FY23. Return on assets and return on equity have rebounded strongly to 2.4% and 22.8% in FY23, respectively, after the clean-up of asset quality over FY21-22, as stated by Nirmal Bang.

Govind Singh, Utkarsh’s MD & CEO, has worked in the banking and financial services industry for over 25 years, specialising in the microfinance sector.

Shares with a face value of Rs 500 crore were issued for the public offering. The net proceeds from the offering, after deducting issuance costs, will be used to strengthen the company’s Tier 1 capital structure in preparation for any capital needs in the future. The range for the offer price was Rs 23–25 per share.

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