Hospital chain Paras Healthcare filed draft papers with markets regulator SEBI on June 4, for its IPO worth Rs 1,800 crore. The company’s IPO is a book-build issue, comprising issuance of fresh equity worth Rs 500 crore.
The healthcare firm which operates under the ‘Paras Health’ brand will offload 1.49 crore equity shares, each of face value Rs 1 apiece to raise an amount aggregating to Rs 1,300 crore.
Here are three key details you should know about the issue:
#1 Paras Healthcare IPO: Issue Size and BRLMs
Of the total float, the company will offload Rs 1,300 crore via the offer for sale route. Investment firm Commelina will sell 1.2 crore shares, while promoter Dharminder Kumar Nagar will offload over 29 lakh equity shares of face value Re 1 each.
The healthcare firm will issue fresh equity shares worth Rs 500 crore. The company’s issue will be handled by JM Financial, BofA Securities, and Nuvama Wealth Management, while Link Intime India will act as the registrar to the offer.
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#2 Paras Healthcare IPO: Utilization of proceeds
The company will majorly utilize fresh towards repaying its borrowings. According to its DRHP, capital worth Rs 218 crore will be deployed towards re-payment and pre-payment of its outstanding borrowings.
Over Rs 82 crore will be invested in its subsidiaries and making the requisite payment, while the remaining proceeds will be utilised for general corporate purposes like issue related expenses, it added.
#3 Paras Healthcare IPO: Key Risks
The company has incurred net losses since the past three fiscal years, making it vulnerable to the risk of not generating enough cash flows. The company is highly reliant on its healthcare business for revenue generation.
All of Paras Healthcare’s hospitals are located in North India, making it vulnerable to the risk of regional concentration. High costs related to provisioning and employee benefits are factors to be monitored.
Limitations relating to expansion, issues pertaining to regulatory framework, unsuccessful development of hospital networks may also hamper the company’s IPO plans.
