Jupiter Life Line makes strong debut; lists at 32% premium over issue price

Hospital chain Jupiter Life Line Hospitals (JLHL) made a stellar stock market debut on Monday with its shares listing at Rs 973 on the NSE, a premium of 32 per cent over the issue price of Rs 735 per share. The stock listed at Rs 960, a 31 per cent higher over its issue price.

Post listing, the stock extended gains and moved 40 per cent higher to Rs 1,028 over its issue price. In comparison, the S&P BSE Sensex was down 0.16 per cent at 67,730 at 10:02 AM.

The initial public offering (IPO) of the multi-speciality hospital chain had received strong response and got subscribed 64.8 times, helped by huge demand from institutional buyers.

The portion for qualified institutional buyers (QIBs) received 181.89 times subscription, while the quota for non-institutional investors got subscribed 36 times and that of Retail Individual Investors (RIIs) was subscribed 8 times.

JLHL is a key multi-specialty tertiary and quaternary healthcare providers in the Mumbai Metropolitan Area (MMR) and western region of India. As on March 2023, it has a total capacity of 1,194 hospital beds across three hospitals which operates under the ‘Jupiter’ brand in Thane, Pune and Indore with 1,306 doctors.

JLHL has mainly focused on to cater middle and upper middle class households where it observes working class segment with organized sector that supports high possession of medical insurance.

JLHL’s has delivered healthy financials with 24.5 per cent revenue growth and 34.6 per cent EBITDA growth between FY20-23.

Overall EBITDA margin has also improved from 17.8 per cent in FY20 to 22.6 per cent in FY23. ROE and ROCE stood at healthy levels of 20.1 per cent and 20.5 per cent in FY23 which are largely in line with average performance of listed peers.

The company’s payor mix showcases that it has very low dependence on central and state government schemes for its revenues, with payments made through self-payers; insurance companies, third party administrators and corporations; and government schemes, accounting for 45.33 per cent, 53.35 per cent and 1.32 per cent, respectively, of its income from hospital services in Fiscal 2023.

SBI Securities, in an IPO note, had said that the issue looks fairly valued across various valuation parameters when compared with its peers. With decent return ratios and margins, the risk reward ratio for long term investors looks favourable, it had said.