Yatharth Hospital Debut Misses Analyst Expectations, Lists At 2% Premium

Analysts expected the multi-care hospitality chain to debut at a 20 per cent premium on the basis of its strong presence in the National Capital Region (NCR).

The company’s shares were valued at a premium of Rs 80 in the grey market prior to listing.

Yatharth Hospital & Trauma Care Services Ltd. debuted in the stock market on Monday to an underwhelming 2 per cent premium. The company started trading in the NSE at Rs 306, against the issue price of Rs 300. It listed on the BSE at Rs 304, 1 per cent higher than it’s issue price.  

According to a Moneycontrol report, the company failed to meet market expectations. Analysts expected the multi-care hospitality chain to debut at a 20 per cent premium on the basis of its strong presence in the National Capital Region (NCR). They further noted that the company’s consistent operational and financial growth contributed to the positive listing. 

The company’s shares were valued at a premium of Rs 80 in the grey market prior to listing, reported CNBC. The grey market represents an unofficial market to trade in shares before they are listed on a stock exchange officially.  

Hem Securities’s senior research analyst, Astha Jain, expected the company to debut at a 20-23 per cent premium. She noted, “Despite weakened market sentiments post Fitch downgrading US credit rating, we believe Yatharth can deliver decent returns on listing day and with its strong credentials and favourable valuation with bright long term prospects of growth in the Indian healthcare sector, we recommend investors to remain invested for the long term,” as quoted by CNBC. 

Yatharth’s initial public offering (IPO) of Rs 687 crore received a positive response from investors. The IPO was subscribed 36.1 times during the listing period of July 26-28, where institutional investors subscribed to the IPO 85.1 times, individual investors subscribed 37.2 times and retail investors placed a bid 8.3 times.

The Noida-based hospital chain runs three super-speciality hospitals in Delhi NCR and one multi-speciality hospital in Madhya Pradesh. The company reported a growth in revenue at a compound annual growth rate (CAGR) of 51 per cent from during the fiscal years of 2021-23. It recorded a debt-to-equity ratio of 1.5x in the fiscal year 2023, which is estimated to be reduced to 0.03x after the Rs 245 crore repayment post the IPO. 

The company’s shares were trading in the NSE at Rs 331 a piece and in the BSE at Rs 331.15 per share as of 11:35 AM on Monday.

(Disclaimer: This report is meant only for information purposes. It should not be treated as a stock recommendation. Reader discretion advised.)