Bad start to primary mkt: Goodwill Hospital withdraws IPO

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

It is a gloomy start to the year for the primary market. Depressed market conditions have already claimed their first victim with Goodwill Hospital and Research Centre withdrawing its initial public offer.

It was the first company that had tried to fight the gloom in the capital market since October 5, 2011. This highlights the nervousness among investors and lack of enthusiasm about the IPO market. Moreover, Investors have stopped participating in the secondary market due to slowdown fears and endless eurozone concerns.

Manish Bhatt of Prabhudas Lilladher says "Investors, after getting hit badly in the current market conditions, are not ready to invest not only at price-to-earnings of 9 but also of 20-25 PEs. It means they are completely ignoring the market for the time being."

The company has decided to withdraw in the morning of last day of IPO itself. The initial public offering opened for subscription during December 30, 2011 to January 09, 2012 - i.e. opened for 7 days.

There was participation only from some retail and non institutional investors while qualified institutional investors did not participate.

Goodwill Hospital was planned to raise Rs 62-crore through the issue, with a price band of Rs 175-185 a share. It was also offering one detachable warrant per equity share.

Company is engaged in running a multi specialty hospital at Noida called Ojjus Medicare, focusing on core areas such as neurology and neuro surgery, cardiology and cardiac surgery with emphasis on joint replacements and sports injuries. It also provides other services like paediatrics, diagnostic, critical care medicine, oncology, dermatology etc.

Company was intended to use issue proceeds for setting up of diagnostic centre at Faridabad (with an outlay of Rs 16.22 crore), establishment of six polyclinics (with cost of Rs 33.97 crore) and repayment of loans (of Rs 10 crore).

The book running lead manager to the issue was  SPA Merchant Bankers Ltd. Beetal Financial & Computer Services Pvt Ltd was the registrar.

4 Jan: Grey market premium/ discount:: Goodwill Hospital IPO ; Muthoot Finance Bonds

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Company Name	Offer Price (Rs)	Expected Listing Price Premium
Goodwill Hospital IPO	175-185	Discount
Muthoot Finance Bonds	Bonds	Discount

IPO Watch: Goodwill Hospital & Research Centre Ltd:: AVOID:: KBS

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


BACKGROUND
Goodwill Hospital & Research Centre Ltd was incorporated on June 26, 2000 and the construction of the hospital was commenced in 2002. The medical consultancy commends on small scale in 2004 and in-patient department started in 2005. In December 2007 the management of the company was taken over by the Ojjus Medicare Pvt Ltd. Subsequently, the new management revamped operations of the hospital by adding super specialty services in Neurology and Cardiology etc., adding bed capacity and installation of high-end medical equipments.
Presently, GHRCL is engaged in the business of running a multi-specialty hospital at Noida called Ojjus Medicare, with focus on areas such as Neurology and Neuro surgery, Cardiology and Cardiac Surgery and Orthopaedics. Other Healthcare Services offered include mother & child care, Oncology, Gynaecology, Nephrology, Dermatology, Dental and Eye Care etc. It has 220 beds, Surgical ICU and Medical ICU, four state-of-the-art Operation Theatres and state-of-the-art Imaging facility with automatic laboratory support. Also, it is on the panel of various Government and large organizations for treatment of their employees.
The GHRCL has installed “Perfexion” Gamma Knife machine for non-invasive treatment of brain tumors, vascular malformations and functional diseases like Parkinson’s disease, trigeminal neuralgia and psychiatric disorders using highly précised focused gamma rays. The Hospital is amongst a few private centres in South and South East Asia to install Perfexion Gamma rays.

Goodwill IPO may not do much to prop up your portfolio ::ET

Please Share:: 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

IPO - Goodwill Hospital and Research Centre: Avoid :: Business Line,

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Small scale of operations, high gearing and dependence on the Gamma Knife are dampeners.

Investors can give the initial public offering of Goodwill Hospital and Research Centre (GHRC) a miss for now. The company runs a single multi-specialty hospital at Noida under the name Ojjus Medicare and is among the few private hospitals in South and South-East Asia that offers Perfexion Gamma Knife services (non-invasive treatment for brain diseases). But, the small scale of operations, high gearing, intense competition in the region and high dependence on the Gamma Knife are dampeners and could make it difficult for the company to replicate its earlier growth rates.

GROWTH CONCERNS

The company operates a 220-bed multi-specialty hospital at Noida with focus on areas such as cardiology, orthopaedics, laparoscopic surgeries and neurosciences. Though the hospital's services straddle across other specialties, its unique selling proposition is the Gamma Knife Machine, which was acquired in FY10. Gamma Knife is a speciality equipment that uses robotic technology to treat brain diseases without having to open up the skull. This service alone makes up about a third of the company's income.

No doubt, the company has grown its revenues and profits at high rates in the last couple of years (compounded growth rates of about 126 per cent and 170 per cent respectively to Rs 54 crore and Rs 16 crore in the last two years). But the growth has largely been on a small base, and driven primarily by its Gamma Knife facility. With ordinary occupancy rates of about 54 per cent and high competition in the region (private hospitals such as Fortis, Max Healthcare, Wockhardt and Apollo), growth momentum is likely to come down in the coming years. Other rivals could acquire the Gamma Knife technology, posing a threat to its revenues. The high debt on its books also adds to the challenges. As of June 2011, the company had a total debt of Rs 104.2 crore (includes ECB of about Rs 18 crore), leading to a debt equity ratio of 2.8 times. GHRC however plans to retire a portion of its debt, about Rs 10 crore, from the IPO proceeds.

GHRC's wholly-owned subsidiary, Ojjus Fidelity Healthcare Private Ltd, plans to set up a super specialty for oncology and rehabilitation and neurology and neurosurgery with 700 beds at Faridabad (estimated cost of Rs 227 crore, of which it has received term loan sanction for Rs 150 crore). GHRC plans to set up a diagnostic centre there for an estimated cost of Rs 16.2 crore, using the IPO proceeds.

Note that GHRC and Ojjus Fidelity would be sharing the gross revenues from the diagnostic centre in the ratio of 70:30 respectively. The company also plans to establish six polyclinics (estimated total cost of Rs 34 crore) using the money raised through the offer. The polyclinics have been planned in Muzzafarnagar, Bulandshahar, Meerut, Saharanpur, Hapur and Moradabad — cities which depend on Delhi and Noida for their high-end healthcare needs. While the company is moving in the right direction, it would be a while before it starts seeing a decent footfall of patients in the new centres.

VALUATIONS

In the price band of Rs 175-185, the offer is priced at 11-12 times its expected March 2012 per share earnings on post-offer equity. The company is also offering detachable tradable warrants that can be converted after 13 months from the date of allotment at a discount of 20 per cent to then prevailing market price. But the above-stated concerns in addition to the current market conditions make the offer somewhat unattractive. Investors may be better off taking a relook at a later date.

OFFER DETAILS

The initial public offer is open from December 30 to January 9. The company plans to raise Rs 62 crore through this offer. SPA Merchant Bankers is the book-running lead manager and Beetal Financial & Computer Services in the registrar to the issue.

Goodwill Hospital and Research Centre IPO opened today: do NOT invest

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Goodwill Hospital and Research Centre IPO opens today: do NOT invest

The share will list at discount

save money.. invest in better stocks

Goodwill Hospital IPO: all details: Prospectus; Application forms; grading report; ASBA forms

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Goodwill Hospital and Research Centre Limited
	*Non-Retail investors i.e. QIB and Non-Institutional Investors Bidding for more than 2 lac shall mandatorily use ASBA facility
Symbol - Series	GHRCL EQ
Issue Period	Dec 30, 2011 to Jan 09, 2012
Post issue Modification Period	January 10,2012
Issue Size	Public issue of [.] Equity Shares aggregating upto Rs 6200 lacs.
Issue Type	100% Book Building
Price Range	Rs.175 to Rs.185
Face Value	Rs.10/-
Tick Size	Re. 1/-
Market Lot	35 Equity Shares
Minimum Order Quantity	35 Equity Shares
IPO Grading	IPO GRADE 3
Rating Agency	CARE
Maximum Subscription Amount for Retail Investor	Rs.200000
IPO Market Timings	10.00 a.m. to 5.00 p.m.
Book Running Lead Manager	SPA Merchant Bankers Limited
Syndicate Member	SPA Securities Limited,SMC Global Securities Limited,Hem Securities Limited,Prabhudas Lilladher Private Limited
Categories*	FI,IC,MF,FII,OTH,CO,IND and NOH.
No. of Cities with Bidding Centers	52
Name of the registrar	BEETAL Financial & Computer Services Private Limited
Address of the registrar	Beetal House, 3rd Floor, 99 Madangir,Behind Local Shopping Centre,Near Dada Harsukh Dass Mandir,New Delhi ? 110 062.
Contact person name number and Email id	Mr. S.P.Gupta, 011-29961281-83, goodwill@beetalfinancial.com
Prospectus	Click Here
Trading Member List	Click Here
Application Forms	Click Here
ASBA e-form link	e-Forms
Grading Report	Click Here
Branches of Self Certified Syndicate Banks (SCSBs) where syndicate / sub syndicate member to submit ASBA form	Click Here

Goodwill Hospital and Research Centre IPO price band 175-185; opens tomorrow

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Issue Terms
Issue price / Floor Price (Rs)	175-185
Application per share (Rs)	175.00
Minimum investment amount (Rs)	6,125.00
Minimum bid (no of shares)	35 shares and in multiple of 35 thereafter
Maximum Shares for Retail	1120-1050

Issue Date and Size
Issue opens	30-Dec-11
Issue closes	09-Jan-12
Listing on	BSE,NSE
Issue size (Rs cr)	62