The New Year has begun on a wrong note for the primary market with the first public issue of the year, the IPO of Goodwill Hospital and Research Centre, being withdrawn, after receiving poor investor response.
The small size issue of the healthcare firm, which was open from December 30, 2011, to January 9, 2012, was subscribed a mere 1 per cent on the penultimate day, according to bid data collated for both the NSE and the BSE. This is one of the worst ever openings for an IPO in India in recent times.
The issue did not receive any bid from any institutional investor and only saw some retail investors and a few odd bids coming from HNIs/corporate investors.
The company, wholly owned by the Chawla family and led by its chairman Kuldeep Chawla and his daughter-in-law Namrata Chawla who serves as the managing director, was looking to raise up to Rs 62 crore. SPA Merchant Bankers was the book running lead managers for the issue.
Goodwill Hospital and Research Centre runs a medical facility in Noida called Ojjus Medicare that focuses on neurology & neuro surgery, cardiology & cardiac surgery and orthopaedics. Founded around 11 years ago, Ojjus is now a 220-bed hospital. For FY2011, it had earned revenues of Rs 53.6 crore, with net profit of Rs 15.71 crore.
Incidentally, the bulk of the IPO proceeds were to be used to set up six polyclinics and a diagnostic centre in Faridabad, in addition to retiring debt.
This is the second IPO to be withdrawn in less than a year. Last May, Motilal Oswal Investment Advisors Pvt Ltd and Centrum Capital Ltd, the book running lead managers, withdrew the public issue of personal and home care products maker Galaxy Surfactants Ltd one day ahead of its closure, after poor response from HNIs and retail investors.
The issue, which sought to raise up to Rs 201 crore by selling a quarter of the company’s shares, was subscribed just 30 per cent on the eve of the penultimate day. This was despite the fact that the firm had raised Rs 30.24 crore from three anchor investors – ICICI Prudential Life Insurance Company, Goldman Sachs India Fund and Arohi Asset Management Pte, as a precursor to its maiden public issue.