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Goodwill Hospital and Research Centre is coming out with an initial public offer to raise around 62 crore. The company will offer one detachable warrant per equity share. The issue is being made through 100% book-building process in the price band of 175 to 185 with a face value of 10 each. The fresh issue is equivalent to nearly 27% of the company's post IPO equity and the issue will result in the promoters' holding falling to 73%. Of the total proceeds of 62 crore, the company will use 16.2 crore for setting up a diagnostic centre at Faridabad, 34 crore for establishing polyclinics and 10 crore for prepaying loans and the remaining will be used for general corporate purposes.
COMPANY & BUSINESSES
The company runs a hospital at Noida called Ojjus Medicare with focus on areas such as neurology and neuro surgery, cardiology and cardiac surgery and orthopaedics . It already has a 220-bed hospital , which is equipped with surgical ICU, medical ICU, four operation theatres and imaging facility. The company plans to set up a diagnostic centre at Faridabad under a wholly-owned subsidiary, Ojjus Fidelity Healthcare. Besides this, the company also intends to set up six polyclinics for treating neuro cardiac, orthapaedics and minimal invasive surgery within the radius of 150 km from Noida.
FINANCIALS
In the fiscal year 2011, the company's total income was 53.6 crore, 134% higher than the previous year. And its earnings in the fiscal 2011 were 22.94 crore, 312% more than the previous year. This growth had come with an infusion of equity through debt and equity. As on June 30, 2011, the debt on the company's book is around 104.2 crore and its debt to equity was 2.8. And the increased debt has weighed heavy on the company's profitability. In the first quarter of the current fiscal, the company's net profit before tax margin was 36% as compared to 43% in FY11. However the operating margin has remained nearly the same. In the first quarter of FY12, its earnings before interest, depreciation and tax margin was 67%. For its Faridabad project, which will cost roughly 220 crore, the company again intends to fund it through debt, which means the company's debt to equity will continue to remain high.
VALUATION
At the upper price band of 185, the company is demanding a price to earning multiple of 9.5 on its estimated FY12 earnings. This is in line with the industry average. But the share comes with a warrant, which will be converted at a later stage to 20% below the trading price, leading to equity dilution. And considering the leveraged balance sheet and not-so-cheap valuations, investors can skip this IPO
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� �
Goodwill Hospital and Research Centre is coming out with an initial public offer to raise around 62 crore. The company will offer one detachable warrant per equity share. The issue is being made through 100% book-building process in the price band of 175 to 185 with a face value of 10 each. The fresh issue is equivalent to nearly 27% of the company's post IPO equity and the issue will result in the promoters' holding falling to 73%. Of the total proceeds of 62 crore, the company will use 16.2 crore for setting up a diagnostic centre at Faridabad, 34 crore for establishing polyclinics and 10 crore for prepaying loans and the remaining will be used for general corporate purposes.
COMPANY & BUSINESSES
The company runs a hospital at Noida called Ojjus Medicare with focus on areas such as neurology and neuro surgery, cardiology and cardiac surgery and orthopaedics . It already has a 220-bed hospital , which is equipped with surgical ICU, medical ICU, four operation theatres and imaging facility. The company plans to set up a diagnostic centre at Faridabad under a wholly-owned subsidiary, Ojjus Fidelity Healthcare. Besides this, the company also intends to set up six polyclinics for treating neuro cardiac, orthapaedics and minimal invasive surgery within the radius of 150 km from Noida.
FINANCIALS
In the fiscal year 2011, the company's total income was 53.6 crore, 134% higher than the previous year. And its earnings in the fiscal 2011 were 22.94 crore, 312% more than the previous year. This growth had come with an infusion of equity through debt and equity. As on June 30, 2011, the debt on the company's book is around 104.2 crore and its debt to equity was 2.8. And the increased debt has weighed heavy on the company's profitability. In the first quarter of the current fiscal, the company's net profit before tax margin was 36% as compared to 43% in FY11. However the operating margin has remained nearly the same. In the first quarter of FY12, its earnings before interest, depreciation and tax margin was 67%. For its Faridabad project, which will cost roughly 220 crore, the company again intends to fund it through debt, which means the company's debt to equity will continue to remain high.
VALUATION
At the upper price band of 185, the company is demanding a price to earning multiple of 9.5 on its estimated FY12 earnings. This is in line with the industry average. But the share comes with a warrant, which will be converted at a later stage to 20% below the trading price, leading to equity dilution. And considering the leveraged balance sheet and not-so-cheap valuations, investors can skip this IPO
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