Narayana Hrudayalaya Pvt Ltd, the country's second-largest hospital chain by the number of operational beds, made a strong stock market debut on Wednesday with its shares closing at 34.68 per cent premium to its issue price.
The shares listed at Rs 291 apiece on the Bombay Stock Exchange and touched a peak Rs 344.20 apiece. The shares closed at Rs 336.70 apiece against the initial public offering price of Rs 250, giving the company a market capitalization of Rs 6,880.83 crore ($1.03 billion), in a weak Mumbai market.
The strong listing underlines significant investor interest in healthcare firms, which are on a market-tapping spree.
The IPO of the company, which runs its business under Narayana Health banner, was oversubscribed 7.45 times, led by institutional buyers. The company had raised Rs 613 crore ($92 million) through the IPO. Ahead of the public issue, it raised Rs 184 crore ($27.5 million) from a group of anchor investors including Singapore's sovereign wealth fund GIC.
India's IPO market rebounded strongly last year and a string of healthcare firms have already listed, floated or filed for public issues.
Diagnostics chain Dr Lal PathLabs Ltd and drugmaker Alkem Laboratories Ltd recently made a spectacular stock market debut with their shares closing substantially higher than their issue price. Early in August, shares of Biocon Ltd's arm, Syngene International Ltd, also had a strong showing.
The buzz around public floatation is likely to continue this year with Bangalore-based HealthCare Global Enterprises Ltd set to launch its IPO this month.
Thyrocare Technologies Ltd, India's largest thyroid testing company, and single-specialty firm Centre For Sight have also filed draft papers with market regulator Securities and Exchange Board of India for their public floats, and SRL Diagnostics is also expected to revive plans for it long-pending IPO.
Narayana Hrudayalaya, founded by cardiologist Devi Shetty in 2000, has a network of 23 hospitals, eight heart centres and 25 primary care facilities across 32 cities, towns and villages in India. In 2014-15, these facilities served about 1.97 million patients. Although it is the third-largest hospital chain by revenue and market value, it has far higher number of bed strength compared to Fortis Hospital.
Its PE investors Pinebridge (formerly AIG Capital) and JPMorgan Partners part-exited in the IPO.