Wednesday, December 28, 2011

Goodwill Hospital IPO

Goodwill Hospital and Research Centre has come out with an IPO of Rs 62 crore. The company is also offering one detachable warrant per equity share. The 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 pediatrics, diagnostic, critical care medicine, oncology, dermatology etc.

The IPO opens on 30th December, 2011 and closes on 9th January, 2012. The company has fixed a price band of Rs 175 to Rs 185 per share.

The company intends to use proceeds of the issue for setting up of diagnostic center 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).

Goodwill Hospital reported a net profit of Rs 4.33 crore on total income of Rs 16.08 crore in the quarter ended June 30, 2011. For the financial year ended on March 31, 2011, company posted a net profit of Rs 15.72 crore and total income of Rs 53.58 crore, an increase of 471.6% and 134% over previous year, respectively.

SPA Merchant Bankers Ltd is the book running lead manager of the issue. Beetal Financial and Computer Services Pvt Ltd is the registrar of the issue.

No new IPO issues were announced in the last 2 months because of weakening stock markets. Most of the IPOs had bad run in 2011. This IPO issue opens on 30th December - the last working day of the year.

Recommendation:
CARE has assigned grade 3 to the IPO which indicates stable investment. The track record of SPA Merchant Bankers, lead manager of the issue is not so great as all of their IPOs are trading at a discount to the listing price when compared with the current price of the stock. The valuations of this IPO also appears to be high so we would not recommend this IPO to investors.

Subscription:
Goodwill Hospital IPO has got withdrawn due to poor response from investors.

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