Asarfi Hospital Limited IPO

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i. Asarfi Hospital Limited, is a 250 bedded multi-speciality hospital, which is serving people for over one and half decade by providing healthcare services in Dhanbad, Jharkhand. Accredited by National Accreditation Board for Testing and Calibration Laboratories (“NABL Accredited”), it is an integrated healthcare service provider, committed to deliver valued healthcare services to our patients that includes prevention, treatment and proper rehabilitation.

ii. They are empanelled with several Government Agencies, Corporate Organizations for providing regular health care facilities to their employees and their dependants. They are also empanelled with the several Insurance and TPA providers.

iii. Their hospital located at Dhanbad, Jharkhand is having departments/services like Cardiology, Neurosciences, General Medicine, Paediatrics & Neonatology, Obstetrics & Gynaecology, General Surgery, Gastroenterology, Orthopaedics Plastic Surgery & Cosmetics, Oncology, Nephrology, Urology, Ophthalmology, ENT, Day Care Services, Dental, Physiotherapy, Emergency, Nutrition & Dietetics, Anaesthesiology & Critical Care, Radiology, Pulmonology, Pain Management etc. among other healthcare services

iv. The hospital has a full-fledged high dependency unit, Emergency Department, Outpatient consultation, CCU, ICU, NICU, SICU, Labor room, Endoscopy room, Neurosurgery and Cardiac unit. The Diagnostic Centre features laboratory and imaging equipment like the Open X-Ray, Ultrasound, CT scan. The Hospital offers both inpatient and outpatient care which covers a wide range of Medical and Surgical specialties.

v. As part of their growth strategy, they are in the process of building a cancer Hospital at Ranguni, Dhanbad, Jharkhand and an educational institute focused on legal education and management, adjacent to the cancer hospital at Ranguni. They’ve also plans to build a Health Management and Research Institute at Ranchi, Jharkhand for which they have provisionally been allotted leased land from Ranchi Smart City Corporation Limited.

Competitive Strengths

i. Well diversified and specialty service offerings
ii. Quality healthcare services
iii. Ability to attract, train and retain quality doctors, consultants and medical support staff

Objects of the Asarfi Hospital Limited IPO:

The company intends to utilize the proceeds of the Issue to meet the following objectives: i. Part Funding of Capital Expenditure of Cancer Hospital at Ranguni, Jharkhand. ii. Acquiring Land on Leasehold basis for Health Management and Research Institute at Ranchi, Jharkhand iii. General Corporate Purpose
DRHP of Asarfi Hospital Limited IPO
RHP of Asarfi Hospital Limited IPO

Asarfi Hospital Limited IPO Details:

Open Date: Jul 17 2023
Close Date: Jul 19 2023
Total Shares: 5,180,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 26.94 Cr.
Lot Size: 2000 Shares
Issue Price: ₹ 51 - 52 Per Equity Share
Listing At: BSE SME
Listing Date: Jul 27 2023

Promoters And Management:

i. Udai Pratap Singh, Managing Director of the company. He has completed Bachelor of Engineering (Electrical & Electronics) from Visvesvaraya Technological University, Karnataka in year 2016 and Master of Engineering from University of Cincinnati, Ohio in year 2017. He currently looks after the overall management of the Company & Hospital. ii. Madhuri Singh, Executive Director of the company. She has completed Secondary School Certificate from Bihar Board of Secondary Education in the year 1988. She currently looks after the overall administration and corporate social responsibility of the Company. iii. Sukanti Kumar Das is the Non-Executive Director of the Company. He has completed his Bachelor of Medicine and Bachelor of Surgery (MBBS) from West Bengal Medical Council in year 1975, followed with Diploma in Obs and Gynae in year 1977 and DM (Obs and Gynae), PGIMER Chandigarh in year 1986. He has more than 37 years of experience in field of Medical and Consultant. He is associated with the company as Gynaecology from more than a decade.

Financials of Asarfi Hospital Limited IPO:

Particulars (In cr) Fy23 Fy22 Fy21
Total Revenue ₹73 ₹66 ₹54
Cost of Material Consumed ₹12 ₹13 ₹14
Purchases of Stock in trade ₹7 ₹11 ₹8
Change in Inventory ₹0 ₹0 ₹0
Employee benefit expenses ₹11 ₹8 ₹8
Finance Costs ₹1 ₹0 ₹0
D&A ₹3 ₹3 ₹2
Other Expenses ₹25 ₹19 ₹15
PAT ₹8 ₹5 ₹3

Recommendation on Asarfi Hospital Limited IPO:

Review and Recommendation of Asarfi Hospital Limited IPO by IZ team A) Pros 1. Asarfi Hospital Limited is a well-established multi-speciality hospital with a history of over one and a half decades, providing healthcare services in Dhanbad, Jharkhand. 2. The company has shown good revenue growth over the years, with revenues increasing from 25 Cr in 2018 to 73 Cr in 2023, representing a decent Compound Annual Growth Rate (CAGR) of 24%. 3. The Profit After Tax (PAT) has witnessed significant growth, rising from 1 Cr in 2018 to 8 Cr in 2023, demonstrating an approximately 8x growth in the last six years. 4. Asarfi Hospital Limited has planned to establish a cancer hospital in Jharkhand, with a total project cost of 75 Cr. Regarding the capital expenditure (Capex) for Asarfi Hospital Limited, the company has already invested approximately 25 Cr by 31st May 2023. However, there is a remaining balance of around 50 Cr for the planned projects. This remaining amount will be funded through different sources. Approximately 28 Cr will be obtained via a bank loan, 8 Cr will come from internal accruals, and 12 Cr will be raised through the IPO funds. 5. The IPO is priced at P/E of 12x. B) Cons 1. A major concern is that the 9.55-acre land purchased by the company to build the cancer hospital from the Jharkhand Government is currently under dispute, with an ongoing court case. If the company were to lose this case, it would pose a significant risk to their operations. 2. The IPO presents a substantial risk due to the uncertain outcome of the land dispute, making it a risky investment proposition. C) Recommendation Based on the above analysis, the IZ team rates the Asarfi Hospital Limited IPO with a score of 3/10. The positive factors, such as revenue and profit growth, are overshadowed by the significant risk associated with the disputed land. Investors are advised to carefully consider the potential consequences of the ongoing court case before making any investment decisions.

Lead Manager of Asarfi Hospital Limited IPO:

  1. Hem Securities Limited

Registrar of Asarfi Hospital Limited IPO:

  1. Cameo Corporate Services Limited

Company Address:

Asarfi Hospital Limited Baramuri, Bishunpur Polytechnic, Dhanbad - 828130 Phone: +91 96088 33708 Email: cs@asarfihospital.com Website: http://www.asarfi.in/

Discussion on Asarfi Hospital Limited IPO:

1 Comment

    Asarfi Hospital is raising funds ~26 Cr to built the cancer hospital and research institute in Ranchi…..However, following is the issue….

    1. Asarfi Hospital is a company that built a hospital and educational institute on a piece of land in Ranguni, Dhanbad.

    2. However, there is a problem with the ownership of the land. Asarfi Hospital doesn’t have clear proof that they own the land or have the right to use it.

    3. Some people are saying that the land doesn’t actually belong to the government or the authority that gave it to Asarfi Hospital, so they shouldn’t have leased it to them.

    4. The High Court of Jharkhand looked into the matter and said that the government didn’t have the right to give Asarfi Hospital the land. They also said that Asarfi Hospital can make a claim against the government if they want.

    5. The High Court sent the case back to a lower court to make a final decision based on the arguments of both sides.

    6. Resolving this issue could take a long time and cost a lot of money. It will also require a lot of attention from Asarfi Hospital’s management team.

    7. If the courts rule against Asarfi Hospital and say that they don’t have the right to use the land, they may have to give up the hospital and other assets they built on the land. This would have a negative impact on Asarfi Hospital’s financial statements.

    8. If the case goes against Asarfi Hospital, it could also harm their reputation and future business.

    9. Asarfi Hospital has other ongoing legal disputes related to the ownership of land, and they can also take a long time to resolve. These disputes may have a negative effect on Asarfi Hospital’s business, financial condition, and future prospects

    Reply

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