Hospital chain Aster DM’s IPO nears halfway mark on second day
Photo Credit: Shah Junaid/VCCircle

The initial public offering (IPO) of hospital chain Aster DM Healthcare Ltd approached the halfway mark on its second day on Wednesday led by institutional investors. The issue will close on Thursday.

The public issue comprising 37.37 million shares, excluding anchor allotment, received bids for 16.16 million shares, stock exchange data showed. The book was subscribed 43.26% at the end of day two.

The book had been subscribed 25.3% at the end of the first day.

The qualified institutional buyers’ book was covered 50.23% of the 10.51 million shares reserved for them. The portion for non-institutional investors, comprising corporate bodies and wealthy investors, was subscribed 23.66%.

Shares reserved for retail investors, whose application value cannot exceed Rs 2 lakh, received 47.9% bids.

Aster DM had last Friday raised Rs 294.04 crore ($45.68 million) from anchor investors. These included UK-based First State Investments, which put in money with the backing of Canadian pension fund CDPQ, short for Caisse de dépôt et placement du Québec.

Aster DM, started by non-resident Indian (NRI) businessman Azad Moopen, allotted 15.47 million shares at the upper end of the Rs 180-190 price band to seven anchor investors, it said in a stock-exchange filing late on Friday.

The firm had re-filed its draft IPO proposal with the Securities and Exchange Board of India on August 9 last year and received the regulator's nod to float an IPO on October 27.

The company had postponed its earlier plan of going public as it had fallen short of the valuation it had desired. Its original plan had received SEBI's approval in November 2016. The company was earlier looking to mop up Rs 609-812 crore via a fresh issue of shares, VCCircle had reported.

At the upper end of the price band, the company is now seeking a valuation of about Rs 9,600 crore ($1.5 billion). It will become India’s second most-valued hospital firm behind Apollo Hospitals, but ahead of Fortis Healthcare and Narayana Hrudayalaya, which had gone public in early 2016.

The company has trimmed its IPO size and is now raising Rs 725 crore compared with the proposed Rs 775 crore at the time of filing its draft prospectus. The proceeds will be used to repay debt and buy medical equipment.

Private equity firms True North and Olympus Capital have decided to not sell any shares in the IPO even though their investments appear to have reached maturity.

True North had first backed the hospital firm in 2008. Olympus Capital entered in 2012. Both firms are sitting on multi-bagger returns on their bets in Aster DM.

Aster DM will join a clutch of pharmaceutical and healthcare companies that have been listed over the past couple of years. These include ChrysCapital-backed Eris Lifesciences, which floated its IPO in June last year.

Diagnostics companies Dr Lal PathLabs Ltd and Thyrocare Technologies Ltd, and hospital chains Narayana Health and Healthcare Global Enterprises Ltd, are among the other healthcare companies that have floated IPOs.

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