Metropolis Healthcare Limited IPO

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(i) Metropolis Healthcare Limited is one of the leading diagnostics companies in India, by revenue, as of March 31, 2018 (Source: Frost & Sullivan). They have a widespread presence across 18 states in India, as of March 31, 2018, with a leadership position in the west and south India (Source: Frost & Sullivan). Vide there widespread operational network, they offer a comprehensive range of clinical laboratory tests and profiles, which are used for prediction, early detection, diagnostic screening, confirmation and/or monitoring of the disease. They also offer analytical and support services to clinical research organizations for their clinical research projects. During the financial year 2018, we conducted approximately 16.0 million tests from approximately 7.7 million patient visits.

(ii) They offer a broad range of approximately 3,480 clinical laboratory tests and 524 profiles, as of March 31, 2018. The profile comprises of a variety of test combinations which are specific to a disease or disorder as well as wellness profiles that are used for health and fitness screening.

(iii) They conduct their operations through their laboratory and service network. As of March 31, 2018, our laboratory network consists of 106 clinical laboratories and our service network comprises 1,130 patient touch points (out of which 28 are located outside India).

Metropolis Healthcare Limited IPO Stock Quote & Charts

1270.65

-0.39%

  • Open: 1280.00
  • High - Low: 1284.00 - 1266.60
  • Previous Close: 1275.65
  • Total Traded Volume: 557
  • Updated On: 16-Oct-2019

Objects of the Metropolis Healthcare Limited IPO:

It is a pure OFS vide which company is selling 13685095 Equity Shares at Rs. 880 at higher band. The Company will not receive anything in this IPO.  

Metropolis Healthcare Limited IPO Details:

Current GMP: 55-57
Open Date: Apr 03 2019
Close Date: Apr 05 2019
Total Shares: 13685095
Face Value: ₹ 2 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 1204 Cr.
Lot Size: 17 Shares
Issue Price: ₹ 877-880 Per Equity Share
Listing At: NSE,BSE
Listing Date: Apr 15 2019

Promoters And Management:

(i) Dr. Sushil Kanubhai Shah is the Chairman and Executive Director of our Company. He holds a bachelor’s degree in Medicine and Surgery and a degree of Doctor of Medicine in Pathology and Bacteriology from the University of Bombay. He was one of the partners of Metropolis Healthcare Services and Metropolis Lab. He was awarded the “Maharashtra Gaurav Award” by the Government of India and the “Lifetime Achievement Award” at the Six Sigma Healthcare Excellence Awards. He was also awarded the “Rajiv Gandhi Excellence Award” by the Indian Solidarity Council and the “Rashtriya Chikitsak Ratna” Award by the National Education & Human Development Organisation. He has more than three decades of experience in pathology business. He has been a Director on our Board since 2005. (ii)  Ameera Sushil Shah is the Managing Director of our Company. She holds a bachelor’s degree in Business Administration from the University of Texas at Austin. She has also completed the Owner-President Management Programme from Harvard Business School, Harvard University. She was one of the partners of Metropolis Healthcare Services and Metropolis Lab. She was featured by Forbes Asia as one among “Asia’s Women to Watch” in 2015 and has also been recognized by Fortune India as one of the “Most Powerful Women” in 2017. She was also awarded the “Women in Leadership Award” by Bloomberg and UTV and was recognized as one of the “Inspiring Business Leaders of India” and “40 under forty-India’s Hottest Business Leaders” by the Economic Times. Additionally, she was also awarded the “Corporate Championship Award” by the US India Business Council. She has more than two decades of experience in pathology business. She has been a Director on our Board since 2008.

Financials of Metropolis Healthcare Limited IPO:

Particulars(M) 2016 2017 2018 9MFY19
Balance Sheet Item
Share Capital 95.44 95.44 95.44 100.36
Net Worth 2789.14 3231.73 4147.68 4680.35
Book Value 58.45 67.72 86.92 93.27
Long-Term Debt 4.59 3.64 2.01 0.77
Short-Term Debt 4.41 4.01 3.70 2.46
D/E 0.00 0.00 0.00 0.00
P/L Items
Revenue 4906.00 5676.00 6515.00 5668.00
EBITDA 1419 1750 1808 1509
EBITDA Margins 28.9% 30.8% 27.8% 26.6%
PAT 800 1075 1105 906
PAT Margins 16.3% 18.9% 17.0% 16.0%
EPS 15.25 21.42 22.02 18.05
Key Ratios and Valuation
ROE 28.7% 33.3% 26.6% 19.4%
P/E 37
P/B 9.46
Mcap 4415 Cr
Mcap/Sales 5.84
EV 4362 Cr
EV/EBITDA 21.7

Comparison With Peers:

Key Parameters Dr. Lal Path Labs Metropolis
Clinical Laboratory  191 115
Patient Service Center 2153 256(owned)+1375(Third Party)
Pick Up points 5624 9000
Number of Patient Visit per Year 15 Million 7 Million
Presence Mainly in North India Mainly in west and south India.
Employees 4316 4113
Revenue(FY-18) 1088 Cr 651 Cr
Revenue Growth in 3 Years(FY16 to FY18) 15.70% 15.24%
PAT(FY-18) 172 Cr 110 Cr
PAT Growth in 3 Years( FY16 to FY-18) 15.59% 17.53%
EPS(FY-18) 20.82 20.61
P/E( after annualizing 9MFY19 Financials) 43 37
Mcap 8782 Cr 4431 Cr
ROE 21.66% 25.75%
ROCE 33% 37%

Recommendation on Metropolis Healthcare Limited IPO:

Review and Recommendation of Metropolis Healthcare Limited IPO from IZ Team is : 5/10. [ The IPO is priced reasonably at P/E of 37 after annualizing 9MFY19 Financials as compared to Dr.Lal Path Labs which is currently trading at P/E of 43. There is a room for 5-10% listing gain. The GMP currently is above 100.]

Registrar of Metropolis Healthcare Limited IPO:

  1. Link Intime India Private Limited

Bid Details of Metropolis Healthcare Limited IPO as on
05-Apr-2019 21:00:00 IST

No.of shares offered No. of shares bid No. of total times
4,015,529 35,653,386 8.88
2,007,764 6,086,306 3.03
1,338,509 2,956,606 2.21
300,000 16,235 0.05
- - -
7,661,802 44,712,533 5.84
No.of shares offered No. of shares bid No. of total times
4,015,529 9,066,491 2.26
2,007,764 4,525,536 2.25
1,338,509 2,217,004 1.66
300,000 10,608 0.04
- - -
7,661,802 15,819,639 2.06
No.of shares offered No. of shares bid No. of total times
4,015,529 26,586,895 6.62
2,007,764 1,560,770 0.78
1,338,509 739,602 0.55
300,000 5,627 0.02
- - -
7,661,802 28,892,894 3.77

Total Number of Applications in Retail Category: 139102

Application-wise Subscription in Retail Category: 1.77X

Discussion on Metropolis Healthcare Limited IPO:

    Polycab is planning to manufacture Copper at Own plant and will supply to other brand
    As per internal communication

    ◆ *Bulk Deals*

    ● *Metropolis Healthcare* (Total shareholding details not given).

    -Bright Star Investments acquired 7 lakh shares at Rs 948.39 each.

    -Smaller Cap World Fund acquired 6.87 lakh shares at Rs 957.67 each.

    (Note: Bright Star Investments is promoted and managed by RK Damani).

    Sold it yesterday at 960… What if I buy again when price drops around 970 and wait for the gain?…. Will it work to make profit?

    15-Apr-2019 METROPOLIS Metropolis Healthcare Ltd BRIGHT STAR INVESTMENTS PRIVATE LIMITED BUY 7,00,000 948.39 (Damani uncle)
    15-Apr-2019 METROPOLIS Metropolis Healthcare Ltd SMALLER CAP WORLD FUND INC BUY 6,86,545 957.67 –

    next 15 days especially why ? any news coming up or hints regarding its increase?

    Book profit for 50% and keep 50% in the kitty for next 10-15 days with stop loss of 900.

    Market wizard : shall i book profits of listing gains or hold it for long term ?

    Applied for 7 lots but hasn’t got any lot.. What is the logic behind it..?? @market wizard

      I had applied only for 1 lot since issue was already oversubscribed. I applied through ICICI direct. does the broker through which we apply have anything to do with the allotment process?

      Mee too,, applied for 5 lots,, 0 allotment!!!! dont know how come my luck so bad!!

    As per sources, Ramesh damani has invested close to 180 Cr in Metropolis.

    Guys how many have applied in Metropolis??

    There is a news in the market that Ramesh Damani has done investment in Metropolis and many big HNIs from Mumbai have participated.

    Good listing Expected.

    Superb response from QIB. IPO is oversubscribed and we can expect 8-10% listing gain from the above hopefully.

    but still overall 100% didnot cross..can we expect still listing gain today is last date.

    I want to go with 1 lot..what is your suggestion market wizard?

    It’s seems QIB has good response for metropolis ipo. We expect 7-8% listing gain. What is Ur view MW?

    I seen that links of screenshot are removed by someone and comments has been edited also some comments are removed that people want to see

      All the junk data which is irrelevant including screenshots etc get removed. Comments are edited if they have any errors. Idea is to keep IZ forums clean, to-the-point and spam free!

    Investorzone. They have set up auto refresh facility.

    can anyone tell me on which site this type of live subscription is available that works without refresh the page

    During the nine months period ended December 31, 2018, they conducted approximately 12.3 million tests from approximately 6.6 million patient visits as compared to approximately 16.0 million tests from approximately 7.7 million patient visits during the financial year 2018.

    According to Frost & Sullivan, the Indian diagnostics market was valued at approximately ₹ 596 billion in the financial year 2018, and is projected to grow to approximately ₹ 802 billion by financial year 2020, driven by favorable changes in demographics, improvements in health awareness, increased spend on preventive care and wellness, increase in medical tourists, increase in lifestyle-related ailments and rising penetration of insurance in India. While the diagnostics industry is largely unorganized, increased brand awareness among patients and customers, increased penetration of specialized tests, and a diverse and large test menu at organized providers provide an opportunity for faster consolidation in the diagnostics industry.

    The peer is Dr. Lal Path Lab. Lal Path Lab has a revenue of close to 1000 Cr in FY18 and Profit of 172 Cr.

    Metropolis Healthcare has a Revenue of close to 550 Cr in FY18 and a profit of 110 Cr.

    The Dr. lal Path lab has a Mcap of 8600 Cr at CMP of 1037 and currently trading at P/E of 50.

    So if we give the same valuation to Metropolis, the Price comes out to be 1000.

    The offered price is 880 on the higher band.

    So listing gain of 5-10% should be there in this IPO.

    *Metropolish Healthcare Limited – IPO Update*

    Issue dates: *03 to 5 April 2019*

    Price Band: *₹ 877 to ₹ 880*

    Bid Lot: *17 Equity Shares* & in multiple thereafter

    Face Value: *₹ 2/- per equity share*

    Issue Size: *₹ 1204 Crs* at upper Band includes 3 lakhs shares for employees reservation

    *Net Offer: ₹ 1177.88 Crs* at upper band

    QIB: 75% of Net Offer (₹ *883.50 Crs* at upper band)

    NIB: 15% of Net Offer (₹ *176.70 Crs* at upper band)

    Retail: 10% of Net Offer (₹ *117.80 Crs* at upper band)

    *Retail Investors can apply through ASBA or UPI mechanism*