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Last week, when the market got the China jitters, hospital chain Narayana Hrudayalaya, listed strongly on the bourses. On January 6, the day of listing, the stock with an issue price of ₹250, opened at ₹291, hit a high of ₹344 and closed the day at nearly ₹337, a gain of 35 per cent. Over the week though, the stock gave up some gains to close at about ₹327 on Friday.
The IPO had been oversubscribed 8.7 times, with strong participation from institutional buyers and high net worth individuals. Poor retail participation was attributed to relatively high valuations.
The Bengaluru-headquartered company operates a chain of 23 hospitals, 8 heart centres and 24 primary care facilities in India. With 5,442 operational beds in 2014-15, the chain catered to over 19 lakh patients.
It has a strong focus in Karnataka and West Bengal with presence in western and central India.
The hospital chain follows a lease/ management contract/revenue share model. Higher contribution from value-added therapies such as cardiac and renal care should help revenue and profit growth in the coming years.
In 2014-15, revenues rose 23 per cent Y-o-Y to ₹1,372 crore. For the six months ended September 2015, the company reported revenues and profits of ₹783 crore and ₹12.5 crore, respectively.
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