Krishna Institute of Medical Sciences (KIMS) – one of the largest healthcare groups operating from Telangana and Andhra Pradesh states in India – has launched its IPO for subscription today. The company plans to raise as much as INR2,144 crore through a mix of fresh shares and an offer for sale (OFS). You might be thinking about the number of shares the company has planned for and also the face value of each share. Then, you are at the right place. In this KIMS IPO review, you can get detailed knowledge and let us discuss whether adding KIMS to your portfolio can be a beneficial move?
KIMS IPO Details
Here are some basic details to know about KIMS IPO to decide whether or not to move:
| Subscription Dates | 16 – 18 June 2021 |
| Price Band | INR815 – 825 per share |
| Fresh issue | INR200 crore |
| Offer For Sale | 25,560,538 equity shares (INR1,944 crore) |
| Overall Size of IPO | Up to INR2,144 crore |
| The least bid (lot size) | 18 shares |
| Face Value | INR10 per equity share |
| Retail Portion | 10% |
| Listing On | NSE, BSE |
| Finalising Of Allotment | 23 June 2021 |
| Listing Date | 28 June 2021 |
KIMS IPO Review: An Established and Growing Name in Healthcare Domain
KIMS is an established name in the healthcare domain in two south Indian states. The group has a total of nine hospitals across these two states of Telangana and AP and has an aggregate bed capacity of more than 3,000. The group has planned to use IPO proceeds to expand its operations in nearby and established cities like Bhubaneswar, Chennai and Bengaluru. There are plans to expand in central India too but the company has made it clear that it will continue to focus on the southern India healthcare market where it has a strong understanding of regional nuances, customer culture and the mindset of medical professionals.
It is worth noting that approximately one-third of its 3,064 beds were launched in the last four years. In the same timeframe, the company’s overall bed occupancy rate in its hospitals increased from 71.83% to 78.60%.
KIMS’ Strong Financial performance
Due to the COVID-19 wave, the group has registered strong revenue and profit growth that can be gauged from the table below. Revenues increased in each of the last three years and this has helped in a complete turnaround in profitability. While the company was in losses up to FY2019, it has posted profits in the subsequent years and has in fact almost doubled profits in FY2021.
KIMS’ Financial Performance (in INR crore)
| FY2018 | FY2019 | FY2020 | FY2021 | |
| Revenue | 700.0 | 923.9 | 1,128.7 | 1,340.1 |
| Expenses | 721.4 | 938.9 | 988.2 | 1,061.1 |
| Comprehensive income | -43.9 | -49.8 | 114.1 | 205.0 |
| Margin (%) | -6.3 | -5.4 | 10.1 | 15.3 |
During the last four years, KIMS has achieved the best revenue growth among its listed peers. Here is the CAGR (2017-2020) rate of this group as compared to other major hospital chains in AP and Telangana:
- Healthcare Global – 16%
- Manipal Hospitals – 16%
- Apollo Hospitals – 16%
- Narayana Hrudayalaya – 19%
- KIMS – 26%
KIMS IPO Review: Future Plans
You can somewhat judge whether investing in the shares of KIMS will be worth it when you know the future plans of the group, isn’t it? Let us throw some light here:
Out of the total IPO Proceeds of INR 200 crore, KIMS has plans to use INR 150 crore towards repaying its debts. The rest of the money will be used for expansion plans, capital expenditure and many others.
With the IPO offering, KIMS has plans to boost the liquidity of funds. These funds will help with expanding bed capacity, augmenting operations and buying healthcare equipment to serve patients better.
KIMS IPO Analysis: Competitive Strengths:
You can decide on investing in an IPO only based on the competitive edge a company has. Here are some points that make KIMS better than other healthcare companies:
- Home of the experienced managerial team
- Strong financial and operational performance
- Highly qualified and trained medical staff and doctors
- One of the largest healthcare service providers in AP and Telangana
Should You Invest?
Now with this IPO having opened for subscription, you might be wondering whether or not to invest in this company. Historically, hospital chains aren’t known to be wealth creators. This statement excludes exceptional years like FY2020 and FY2021. Nevertheless, KIMS has demonstrated otherwise through growing profits.
In terms of valuations, the company’s price band translates to PE ratio range of 30.85 – 31.23. This isn’t very attractive considering that the figures are inflated as a result of Covid-19 pandemic. Although its Return on Net Worth (RONW) of 19.93% is decent, it is difficult to be taken on face value for the simple reason mentioned above.
