Manipal Health Enterprises, one of India's leading private hospital chains, is poised for a muted market debut in Mumbai. The company's initial public offering (IPO), which raised approximately $960 million (₹9,275.22 crore), is expected to list flat or at a discount, according to analysts and grey market trends. The IPO price band was set at ₹560-₹590 per share, valuing the company at over ₹77,600 crore at the upper end.
Grey market premium (GMP) signals have been largely pessimistic. Over the past 12 sessions, the GMP fluctuated between a low of ₹-15 and a high of ₹35, settling around ₹3 or even a discount of ₹5-₹6 on the day of listing. This suggests an estimated listing price of ₹593 (0.51% higher than the IPO price) or around ₹584 per share, respectively. This subdued outlook is attributed to the company's premium valuation, with an FY26 P/E multiple of 85.67x, which is higher than several listed hospital peers.
The IPO, which was open for subscription from July 29 to July 31, was subscribed 4.92 times overall. Qualified Institutional Buyers (QIBs) showed strong interest with a subscription of 8.25 times, while Non-Institutional Investors (NIIs) subscribed 1.02 times. However, the Retail Individual Investors (RIIs) segment received only 93% subscription. Proceeds from the fresh issue, totaling ₹8,000 crore, are primarily allocated to repay or prepay borrowings of its subsidiary (₹5,378 crore) and acquire a minority stake in Sahyadri Hospitals (₹574 crore), with the remainder for general corporate purposes. Analysts like Mahesh M. Ojha from Kantilal Chhaganlal Securities note that the use of proceeds is not geared towards significant capacity expansion.
Analysts also point to Manipal Health Enterprises lagging peers on key operating metrics, including lower bed occupancy, an average length of stay (ALOS) of 2.78 days, and declining return on capital employed (ROCE). While the healthcare sector in India has long-term growth potential due to increasing incomes and insurance penetration, analysts like Darshan Rathod from Multyfi advise investors to temper listing expectations, as the IPO pricing already reflects much of the company's future growth. Some suggest booking profits if there are meaningful listing gains, or waiting one to two quarters for better visibility on earnings and valuations.
The IPO was managed by several book-running lead managers, including Kotak Mahindra Capital Company, Axis Capital, Goldman Sachs (India) Securities, Jefferies India, J.P. Morgan India, UBS Securities India, and DBS Bank India, with KFin Technologies acting as the registrar.
