Krishna Institute of Medical Sciences Limited IPO

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(i) Krishna Institute is the largest corporate healthcare groups in AP and Telangana in terms of number of patients treated and treatments offered, according to the CRISIL Report.

(ii) They provide multi-disciplinary integrated healthcare services, with a focus on primary secondary & tertiary care in Tier 2-3 cities and primary, secondary, tertiary and quaternary healthcare in Tier 1 cities.

(iii) Krishna Institute operates 9 multi-specialty hospitals under the “KIMS Hospitals” brand, with an aggregate bed capacity of 3,064, including over 2,500 operational beds as of December 31, 2020, which is 2.2 times more beds than the second largest provider in AP and Telangana, according to the CRISIL report.

(iv) They offer a comprehensive range of healthcare services across over 25 specialties and super specialties, including cardiac sciences, oncology, neurosciences, gastric sciences, orthopaedics, organ transplantation, renal sciences and mother & child care.

History of Krishna Institute Medical of Medical Sciences

(i) The company was started in the year 2000 from Nellore with one hospital and has a capacity of approximately 200 beds. Today, it has grown to a chain of multi-specialty hospitals through organic growth and strategic acquisitions under the leadership of Dr. Bhaskara Rao Bollineni, founder and Managing Director, and Dr. Abhinay Bollineni, Executive Director and CEO.

(ii) Krishna Institute of Medical Sciences has a flagship hospital at Secunderabad which is one of the largest private hospitals in India at a single location (excluding medical colleges), according to the CRISIL Report, with a capacity of 1,000 beds.

(iii) In the last few years, the company has significantly expanded its hospital network in recent years through acquisitions of hospitals in Ongole in Fiscal Year 2017, Vizag and Anantapur in Fiscal Year 2019 and Kurnool in Fiscal Year 2020. Approximately one-third of our 3,064 beds were launched in the last four years.

About Founder of Krishna Institute of Medical Science

Dr. Bhaskara Rao Bollineni is a renowned cardiothoracic surgeon in India. He has over 27 years of experience in cardiothoracic surgery and has worked in several other leading medical institutions in the country. He started KIMS Nellore in the year 2000 with the vision to create a hospital system for his home state of AP that is capable of attracting top medical talent and providing high-quality care at affordable prices. Under his leadership, and that of Dr. Abhinay Bollineni, who joined KIMS in 2014,  have expanded Krishan Institute of Medical Sciences into nine cities across AP and Telangana through a combination of greenfield, brownfield and acquisition-led expansion.

Prudent Capex Krishna Institute of Medical Sciences

In Fiscal Year 2020, the capital expenditure per bed was ₹ 63 Lakh for hospitals in Tier 1 cities and ₹ 22 Lakh for hospitals in Tier 2-3 cities, compared to the industry average of ₹ 50-80 Lakh in Tier 1 cities and ₹ 10-50 Lakh in Tier 2-3 cities, according to the CRISIL Report.

Competitive Strengths

(i) The organization is having 20 years of involvement with offering present-day medical services benefits in all noticeable parts of clinical science
(ii) The organization’s lead emergency clinic in Secundrabad is one of the biggest private emergency clinics in India
(iii) It has nine deliberately found medical services habitats to oblige patients from AP, Telangana, and adjoining states

Objects of the Krishna Institute of Medical Sciences Limited IPO:

(i) Fresh Issue of Shares (200 Crores). (ii) OFS of (1943.18 Crores).
DRHP of Krishna Institute of Medical Sciences Limited IPO
RHP of Krishna Institute of Medical Sciences Limited IPO

Krishna Institute of Medical Sciences Limited IPO Details:

Open Date: Jun 16 2021
Close Date: Jun 18 2021
Total Shares: 21,340,931
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Building
Issue Size: 2143.74 Cr.
Lot Size: 18 Shares
Issue Price: ₹ 815-825 Per Equity Share
Listing At: NSE,BSE
Listing Date: Jun 28 2021

Promoters And Management:

(i) Dr. Bhaskara Rao Bollineni, is the Managing Director of the Company. He holds a bachelor’s degree in medicine and surgery from Andhra University and a master’s degree in general surgery from Madras Medical College, Chennai. He has over 27 years of experience in cardiothoracic surgery and has in the past held various positions with Apollo Hospitals, Austin Hospital, University of Melbourne, and Mahavir Hospital and Research Centre. (ii) Anitha Dandamudi, is a Whole-time Director of the Company. She holds a diploma in business management from the ICFAI University and a certification for the six-sigma green belt.  She has over 16 years of experience in the hospital industry, having held various positions with the Company, and has also served as vice president of administration at e-Talent Software Limited. (iii) Sandeep Naik, is a Non-executive Director of the Company. He holds a bachelor’s degree in engineering from the University of Bombay and has completed his master’s degree in science from the Virginia Commonwealth University and a master’s in business administration from Wharton School of Business at the University of Pennsylvania.

Financials of Krishna Institute of Medical Sciences Limited IPO:

(Figures in Crores)
Particulars Mar-21 Mar-20 Mar-19 Mar-18
Sales 1329 1,122 918 663
Purchase of Stock in Trade 282 257 216 162
Changes in Inventories 62 -3 -6 -3
Employee Benefit Expenses 220 198 163 121
Other expenses 450 425 463 314
Operating Profit 315 244 80 68
OPM % 23.70% 21.82% 8.82% 10.32%
Other Income 10 6.08 5.86 36.38
Interest 32 39 45 83
Depreciation 69 70 56 40
Profit before tax 279 140 -15 -20
Total Tax Exp. 73 25 33 25
Net Profit 206 115 -48 -46
NPM % 15.50% 10.25% -5.29% -6.96%
No. of shares 8 8 8 8
EPS in Rs. 25.75 14.37 -6 -5.75

Comparison With Peers:

Peer 3-year Revenue 3 year PAT OPM (FY21 ROE  (FY21) D/E P/E 3 Years Return
Krishna Institute 26% 60% 23% 20.00% 0.24x 33x NA
Apollo Hospitals 9% 20% 10% 6.50% 1.05 239x 80.00%
Fortis Healthcare -6% NA 10% NA 0.22x NA 34.00%
Narayana Hrudayalaya 5% NA 7% NA 1x NA 45.00%
Max Healthcare 32% NA 16% NA 0.23x NA 134%

Recommendation on Krishna Institute of Medical Sciences Limited IPO:

Review and Recommendation of KIMS IPO by IZ team is 6/10. 1. All the peers except Apollo Hospitals have shown negative PAT in the year FY21. And KIMS in the same period, has shown profit almost doubling in FY21 from last year. 2. OPM margins of KIMS are superior as compared to peers. All the peers are having margins in the range of 10-16% while KIMS IPO has margins of 23%. 3. Despite negative performance in FY21, all the hospital stocks have given excellent returns to the shareholders. 4. P/E of 33x looks reasonably valued as compare to peers.

Lead Manager of Krishna Institute of Medical Sciences Limited IPO:

  1. Axis Capital Limited

Registrar of Krishna Institute of Medical Sciences Limited IPO:

  1. Kfin Technology Private Limited

Company Address:

D. No. 1-8-31/1, Minister’s Road, Secunderabad –3, Telangana 500 003, India; Tel: +9140 4418 6000 Website: www.kimshospitals.com

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