KIMS Hospitals lists at 22 per cent premium over issue price

Krishna Institute of Medical Sciences (KIMS) made a good debut at the bourses, on Monday, with the stock listing at Rs 1,009, up 22 per cent against its issue price of Rs 825 per share on the National Stock Exchange (NSE).

At 10:06 am, the stock was trading at Rs 1,003, after hitting a low of Rs 990 on the NSE and BSE. A combined 4.38 million shares have changed hands on the counter on both the exchanges, so far.

KIMS is one of the largest corporate healthcare groups in Andhra Pradesh and Telangana in terms of the number of patients treated and treatments offered. It operates nine multi-specialty hospitals under the 'KIMS Hospitals' brand, with an aggregate bed capacity of 3,064, including over 2,500 operational beds as of March 31, 2021.

The company has a flagship hospital at Secunderabad, which, according to Crisil, is one of the largest private hospitals in India at a single location with a capacity of 1,000 beds. At the end of FY21, its nine hospitals had recorded average revenue per operating bed of Rs 20,609, and bed occupancy rate of 78 per cent.

Most of the brokerages recommend investors subscribe to the issue for a long-term considering healthy industry growth prospects and the company's strong track record.

The public issue of KIMS had seen a decent response with the issue oversubscribed 3.86 times as the offer received bids for 55.6 million equity shares against IPO size of 14.4 million equity shares. The qualified institutional buyers have put in bids for 5.26 times of their reserved portion while the non-institutional investors portion was subscribed 1.89 times. A part set aside for retail investors has been subscribed 2.90 times. The proceeds from the fresh issue will be used to repay debt of the company and its subsidiaries.

Religare Broking believes that the high-quality healthcare and the company's encouraging financial performance make KIMS well-positioned to consolidate India’s large, unorganized and yet rapidly growing and underserved affordable healthcare market. Besides, KIMS has diversified revenue streams with no single specialty accounting for more than 25 per cent of its total income in the last three years.