The initial public offering of HealthCare Global Enterprises Ltd (HCG), operator of a chain of cancer treatment hospitals, was covered 21 per cent at the end of the first day of the issue on Wednesday thanks mainly to institutional buyers.
The issue of 16 million shares received bids for 3.4 million shares, according to data from the stock exchanges.
Institutional buyers subscribed to 34 per cent of the 8.94 million shares reserved for them. Retail investors bid for only 11 per cent of the 2.98 million shares set aside for them while non-institutional investors barely bid for their portion of 4.47 million shares.
The issue will close on March 18. The company has set the price band for the issue at Rs 205-218 a share and is targeting a valuation of up to Rs 1,854 crore ($276 million).
On Tuesday, the company raised Rs 292.3 crore ($43.4 million) from a bunch of anchor investors, including International Finance Corp and PE firm Sabre Partners.
The Bangalore-based company allotted 13.41 million shares at Rs 218 a share, the upper end of the price band, to about a dozen investors, including PE investors, mutual funds, insurance firms and other institutional investors.
IFC, the World Bank’s private-sector arm, subscribed to one-third of the anchor allotment portion for Rs 95 crore. Sabre Partners, which has morphed into a healthcare-focused PE firm, put in Rs 47 crore through two entities.
Other anchor investors included HDFC Standard Life Insurance, Reliance Life Insurance and a portfolio investment unit under Citigroup.
The overall issue (including anchor allotment portion) comprises a fresh issue of up to 11.6 million shares and an offer for sale of up to 18.2 million shares by its existing shareholders.
The offer would constitute up to 35.03 per cent of the company's post-offer paid-up share capital.
Among the existing investors, PremjiInvest, India Build Out Fund (now under Quadria Capital) and Temasek have offered to sell shares in the IPO.
PremjiInvest and India Build Out Fund are looking to sell half of their holding. Temasek, which invested in the company just two years ago, has offered to sell a quarter of its stake.
HCG was founded in 1998 and started expanding in 2006. Its IPO comes on the back of a string of spectacular listings in the past couple of months by hospital chain Narayana Hrudayalaya Pvt Ltd, diagnostics chain Dr Lal PathLabs Ltd and drugmaker Alkem Laboratories Ltd.
Kotak Mahindra Capital, Edelweiss, Goldman Sachs, IDFC Securities, IIFL and YES Bank are the book managers to the HCG issue.