Medi Assist Healthcare IPO opens for subscription. Should you apply?

SECTIONSMedi Assist Healthcare IPO opens for subscription. Should you apply?By Akash Podishetti, ETMarkets.comLast Updated: Jan 15, 2024, 09:16:00 AM ISTRate StoryFollow usShareFont SizeAbcSmallAbcMediumAbcLargeSavePrintCommentSynopsis

Medi Assist Healthcare IPO: The IPO of Medi Assist Healthcare, a third-party administrator providing services to insurance companies, opens for subscription. The company has raised Rs 351 crore from anchor investors, including Nomura, Goldman Sachs, and HSBC. The IPO is an OFS and the company will not receive any funds. Analysts recommend subscribing to the issue due to the company's market-leading position and growth potential. The IPO price band is set at Rs 397-418 per share, with 50% reserved for QIBs, 35% for retail investors, and 15% for non-institutional investors.

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The initial public offer (IPO) of Medi Assist Healthcare opens for subscription today. The issue, which closes on January 17, is completely an OFS of 2.8 crore shares.

Ahead of the issue launch, the company has raised Rs 351 crore from anchor investors. Prominent names who participated in the anchor round include Nomura, Goldman Sachs, Pinebridge Global, Troo Capital and HSBC.

The company will not receive any funds from the IPO since it is completely an OFS and the entire proceeds will go to the selling shareholders.

Medi Assist Healthcare provides third party administration services to insurance companies through its wholly owned subsidiaries. A third party administrator is an organization that processes health insurance claims for insurance companies and provides services such as policy administration, customer service and network management, among others.

Some of the company's strengths include a well established business model, scalable technology-enabled infrastructure, longstanding relationships with the majority of insurance companies and experienced management team and marquee shareholders.

Read more: IPOs this week: Medi Assist Healthcare, 2 SME issues on the radar for investors

Medi Assist Healthcare IPO review

Most analysts advised investors to subscribe to the issue as the company's market leading position as a third-party administrator enhances the ability to benefit from the prospects of the health insurance industry.

"Medi Assist's strong market position and growth potential are attractive, the identified risks and premium valuation necessitate careful assessment by investors," said Swastika Investmart with a neutral recommendation.

"Based on the upper price band, the company’s P/E is valued at a multiple of 38x for FY23. We recommend subscribing for listing gains and long term," said Canara Bank Securities.

Choice Broking and BP Equities also have a subscribe recommendation on the IPO.

Medi Assist Healthcare IPO price band

The company has fixed a price band of Rs 397-418 per share for its IPO. Investors can bid for 35 shares in 1 lot and in multiples thereafter.

About 50% of the offer is reserved for qualified institutional buyers (QIBs), 35% for retail investors and 15% for non-institutional investors.

Also read: Medi Assist Healthcare IPO opens on Monday: 10 things to know before subscribing

Medi Assist Healthcare Financials

For the six months ended September 2023, the company's total income rose 26% year-on-year to Rs 312 crore, while net profit fell 39% to Rs 22.5 crore.

Medi Assist Healthcare GMP

According to market analysts, the current GMP of Medi Assist Healthcare is Rs 30 in the unlisted market.

Axis Capital, IIFL Securities, Nuvama Wealth Management, and SBI Capital Markets are the book running lead managers to the issue.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)Connect with Experts - Wealth creation made easy