Metropolis Healthcare's share sale via initial public offering (IPO) opened for subscription on Wednesday. In the Metropolis Healthcare IPO, the Mumbai-based diagnostics company aims to raise around Rs 1,200 crore. Metropolis Healthcare shares are priced in a band of Rs 877-880 per share for the IPO. Metropolis Healthcare is selling 1.37 crore shares of face value of Rs 2 per share in the price band of Rs 877-880 and the total issue size is of Rs 1,204 crore, the company said in the IPO documents filed with stock markets regulator Securities and Exchange Board of India (SEBI). The Metropolis Healthcare IPO will close on April 5.
Metropolis Healthcare - Company Profile
Metropolis Healthcare is a diagnostics company which mainly conducts pathology tests in India, with a wide presence in the western and southern regions of the country. Its hub-and-spoke model has a laboratory network comprising 115 clinical laboratories, 1,631 patient touch points (of which 256 are owned), 9,000 pickup points and 552 referral centres as of December 2019, covering 197 Indian cities and five locations outside the country, according to the company's Red Herring Prospectus filed with markets regulator Sebi.
Metropolis Healthcare IPO: Lot Size, Price Band And Other Key Details
The issue consists of an offer for sale (OFS) of 62.7 lakh shares by the promoter of the company Dr Sushil Kanubhai Shah and of sale of 74.1 lakh shares by another shareholder CA Lotus Investments. Investors can bid in lot size of Rs 17 shares per lot and in multiples thereafter.
The company's 42 per cent of revenue is from individual patients and the rest is from B2B/institutional clients. The Western and Southern region accounted for 52 per cent and 26 per cent of its revenue as on December 2018, Red Herring Prospectus said.
During the nine months period ended December 31, 2018, its revenue from operations was Rs 559.30 crore and profit was Rs 88.77 crore, Metropolis Healthcare said.
Metropolis Healthcare experienced considerable growth over the past three years and has significantly expanded its operations and service offerings. Its revenue from operations grew from Rs 475.46 crore for the financial year 2016 to Rs 643.56 crore for the financial year 2018.
Its annual profit grew from Rs 81.95 crore for the financial year 2016 to Rs 109.74 crore for the financial year 2018.
Here's what brokerages say on the Metropolis Healthcare IPO:
Metropolis Healthcare has a long runway for growth in our opinion owing to its young network and consolidation opportunities in the Industry, IIFL said in an IPO note.
Metropolis business is more comparable to Dr. Lal Pathlabs than Thyrocare. At Rs 880 per share at the upper band Metropolis is seeking 39 times and 26 times its FY19 annualised/FY21 estimated earnings per share (EPS) against 43 times and 27 times FY19 annualised/FY21 estyimated EPS for Dr. Lal Pathlabs. We recommend subscribe to the issue from a longer-term perspective, IIFL note added.
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