Jupiter Life Line Hospitals IPO Analysis and Review

Jupiter Life Line Hospitals Limited is gearing up to kick off its Initial Public Offering (IPO) on September 6, 2023. If you’re considering investing in this IPO, you may be pondering whether it’s a smart choice. In this thorough article, we will furnish you with all the crucial information, dates, advantages, disadvantages, and an extensive assessment of the Jupiter Life Line Hospitals IPO. Armed with this knowledge, you can make an informed decision on whether or not to buy or subscribe to this IPO.

Jupiter Life Line Hospitals IPO Details

IPO Open September 6, 2023
IPO Close September 8, 2023
IPO Price ₹695 – ₹735
Face Value ₹10
IPO Size ₹869.08 Cr
Listing At BSE, NSE
Lot Size 20

Jupiter Hospital IPO Dates and Timetable

IPO Opens on 06-Sep-23
IPO Closes on 08-Sep-23
Basis of Allotment 13-Sep-23
Initiation of Refunds 14-Sep-23
Credit of Shares to Demat 15-Sep-23
Listing Date 18-Sep-23
Cut-off time for UPI mandate confirmation 08-Sep-23

About Jupiter Life Line Hospitals Ltd

Jupiter Life Line Hospitals Ltd, established in 2007, is a prominent multi-specialty tertiary and quaternary healthcare provider primarily serving the Mumbai Metropolitan Area (MMR) and the western region of India.

The company operates three hospitals under the “Jupiter” brand located in Thane, Pune, and Indore, boasting a combined operational bed capacity of 1194 beds and a team of 1,306 doctors, including specialists, physicians, and surgeons, as of March 31, 2023.

Additionally, the company is in the process of constructing a state-of-the-art multi-specialty hospital in Dombivli, Maharashtra, which is anticipated to house over 500 beds.

Objects of the Issue

The objects of the IPO issue contains both Offer for Sale (OFS) and fresh issue.

Under OFS, the amount goes to selling share holders.

Fresh issue would be used for the following objectives:

  • Repayment/pre-payment, in full or part, of borrowings availed from banks by the company and aterial Subsidiary.
  • General corporate purposes.

EMS IPO – Details and Review

Jupiter Lifeline Hospitals Limited Financials

Financial Year ending / Period ending (Amt in Crores)
Particulars FY21 FY22 FY23
Assets 788.9 908.7 985.5
Revenue 490.3 737.1 903.0
Profit After Tax -2.3 51.1 72.9
Profit % -0.47% 6.94% 8.07%
Net Worth 246.4 288.4 363.9
Total Borrowing 425.5 495.3 468.6

Jupiter Life Line Hospitals IPO Price Evaluation:

The IPO price range for Jupiter Life Line Hospitals is set at Rs 695 to Rs 735 per share.

When we analyze the Price-to-Earnings (P/E) ratio based on the earnings per share (EPS) for the last fiscal year (FY23) of Rs 12.95, it equates to a P/E ratio of 57x. Additionally, if we consider the weighted EPS for the last three years, which is Rs 9.62, the P/E ratio works out to be 76x.

In comparison, listed peers such as Apollo Hospitals have a P/E ratio of 84x (the highest), and Fortis Healthcare is trading at a P/E of 40x (the lowest). The industry average P/E ratio stands at 50x. Therefore, the IPO price range, with a P/E ratio ranging from 57x to 76x, appears to be on the higher side, which some investors may perceive as overpriced.

Investors should carefully weigh these valuation metrics and consider other factors, such as the company’s growth prospects and financial health, before making a decision to invest in the Jupiter Life Line Hospitals IPO.

Positive Aspects of Investing in Jupiter Life Line Hospitals IPO:

  1. Diverse Healthcare Services: Jupiter Life Line Hospitals stands out in the healthcare sector by offering specialized services like neuro-rehabilitation and multi-organ transplantation, catering to unique medical needs.
  2. Robust Revenue Growth: The company has demonstrated impressive revenue growth from FY21 to FY23, indicating its ability to meet the increasing healthcare demands in the region it serves.
  3. Accreditations and Certifications: All of Jupiter Life Line Hospitals’ facilities in Thane, Pune, and Indore hold accreditations from the National Accreditation Board for Hospitals & Healthcare Providers (NABH). This ensures the delivery of high-quality healthcare services, which is a positive indicator for patients and investors alike.

Risk Factors to Consider:

  1. No Benefit from OFS Portion: The Offer for Sale (OFS) portion of the IPO benefits the selling shareholders, not the company itself. Investors should be aware that their investment will not directly contribute to the company’s growth.
  2. Dependency on Thane Hospital: A substantial portion of the company’s revenue relies on its Thane hospital. Any adverse events or impacts on this facility could have significant consequences for the company’s financial performance.
  3. Regulatory Challenges: The healthcare industry is subject to rigorous regulations. Non-compliance with these regulations or changes in them could pose risks to the company’s operations and financial stability.
  4. High Operational Costs: Jupiter Life Line Hospitals faces substantial expenses related to medical equipment, staff salaries, and infrastructure maintenance. Managing these costs efficiently is essential for maintaining profitability.

Before investing in the Jupiter Life Line Hospitals IPO, it’s crucial for potential investors to carefully assess these positive factors and risks, conduct thorough due diligence, and consider their investment goals and risk tolerance.

Jupiter LifeLine Hospitals IPO Review and Conclusion:

When considering whether to invest in this IPO or not, there are both positive and negative aspects to consider.

Positive Aspects:

  1. Specialized Services: Jupiter LifeLine Hospitals’ focus on specialized services like neuro-rehabilitation and multi-organ transplantation sets it apart in the healthcare sector.
  2. Diverse Revenue Streams: The company’s ability to generate revenue from various sources and its strong revenue growth from FY21 to FY23 demonstrate its adaptability to changing healthcare demands.
  3. Accreditation: Being accredited by NABH underscores the company’s commitment to delivering high-quality healthcare services.

Negative Aspects:

  1. Dependency on Thane Hospital: A significant portion of the company’s revenue comes from its Thane hospital, which makes it vulnerable to any issues that may affect this facility.
  2. Regulatory Challenges: The healthcare industry’s stringent regulations could pose compliance challenges, impacting the company’s operations.
  3. High Operational Costs: Elevated expenses related to medical equipment, staff, and infrastructure maintenance could potentially affect profitability.
  4. Capital Utilization Questions: IPO proceeds going toward borrowing repayment and the limited benefit from OFS may raise questions about how effectively the capital is being utilized.
  5. Overpriced IPO: The IPO price is considered to be on the higher side, which could impact its attractiveness to potential investors.

In conclusion, while Jupiter LifeLine Hospitals has several positive attributes, including its specialization and revenue diversification, investors should be aware of the challenges it faces, such as its dependence on one facility and regulatory complexities. The IPO price is also a consideration. It’s advisable for investors to thoroughly evaluate their investment goals, risk tolerance, and conduct due diligence before deciding whether to invest in this IPO.

Jupiter Life Line Hospitals IPO

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