The initial public offering (IPO) of Global Health, which operates the Medanta hospital chain, received an offer for 42.74 lakh shares on November 3, the first day of bidding, with a 9% take-up rate of 4.67 crore shares.

Subscription data provided by the exchange shows that retail investors bought 8% of their allocated shares, while non-institutional investors bid for 4% of their reserved shares.

Qualified institutional buyers bid 16% of the portion reserved for them. The offer size has been reduced from Rs 6.56 crore to Rs 4.67 crore after the company raised Rs 661 crore via an anchor book in November. The IPO will close on November 7.

Global Health is targeting to raise Rs 2,205.6 crore through the IPO, comprising Rs 500 crore in a new issue and an offer of Rs 1,705.6 crore (5.07 crore shares) from selling shareholders. The price range has been fixed at Rs 319-336 per share.

Proceeds from the new offering will be used to repay debt and for general corporate purposes. More than three-quarters of the proceeds will go to selling shareholders Anant Investments and Sunil Sachdeva (jointly with Suman Sachdeva).

Founded in 2004, Medanta is one of the largest privately-owned multi-speciality hospital chains in North and East India. It has five hospitals in operation in Gurugram, Indore, Ranchi, Lucknow and Patna, while one is under construction in Noida, Uttar Pradesh.

As of June 2022, Medanda offers more than 30 specialist medical services, employs more than 1,300 doctors, and has 2,467 beds. In the top price range of Rs 336, Medanta trades at 46 times earnings per share (FY22E), in line with peers, Geojit Securities said.

Considering its strong brand value, new hospitals, rising average revenue per bed (ARPOB), pick-up in medical tourism, increasing affordability of medical services, and a promising industry outlook, the brokerage gives a “subscribe” rating on a medium-term basis.

The Indian healthcare industry is expected to grow at a CAGR of 13-15% and reach Rs 8.3 lakh crore in FY26, mainly thanks to the government’s healthcare services and schemes, Ayushman Bharat and the National Health Insurance Scheme increased affordability.