Four months after withdrawing its proposed public issue Goodwill Hospital and Research Centre has refiled documents for an initial public offering (IPO) to raise around Rs 98 crore ($18.5 million) or around 50 per cent more than the previous attempt. This comes within days of Samvardhana Motherson Finance pulling out its public issue after poor investor response.
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 the 10-month period ended January 31, 2011, it had earned revenues of Rs 51.6 crore, with net profit of Rs 11.71 crore.
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. In its revised draft prospectus, the company has added two more polyclinics and a cosmetology & wellness centre in Gurgaon as object of the issue.
In the first attempt the company was looking at an equity dilution of around 25 per cent with overall valuation of around Rs 250 crore at the upper end of the price band. Although the company is still eyeing a similar corporate valuation, if the last transaction where the promoters subscribed to fresh shares of the firm is taken as a benchmark, Goodwill is looking to dilute as much as 40 per cent stake, as per VCCircle estimates.
It had set a price band of Rs 175-185 a share in the first attempt. Even as the pricing details is yet to be worked upon in its revised IPO draft, the last share issue was at Rs 152.31 a piece in January.
The small-size issue of the healthcare firm, which was open between December 30, 2011 and 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 was 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. The same merchant banker is handling the proposed issue again.
This was the second IPO (now third, after Samvardhana Motherson) 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 in spite 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.
Samvardhana Motherson also failed to appeal to the public even after managing to sell a large chunk of the issue to anchor investors.
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