Bengaluru-based Medi Assist Healthcare Services is set to open its Initial Public Offering (IPO) for subscription on Monday, January 15. As anticipation builds, the company’s shares are already commanding a premium of ₹30 in the unlisted market. Analysts express a ‘Subscribe’ sentiment to the public offer, citing the company’s dominant position in the third-party administrator (TPA) market and other positive indicators. Here’s a closer look at what to consider.
Analyst Recommendations and Perspectives:
- Globe Capital Advocates a ‘Subscribe’ for Medium to Long Term: Analysts at Globe Capital view Medi Assist as a unique operator in the TPA industry, emphasizing the company’s potential for expansion and resilience in the market. The first-mover advantage in the industry post-IPO positions Medi Assist as a firm worthy of consideration for medium to long-term investors.
- Choice Broking Recommends a ‘Subscribe’: Choice Broking highlights the attractively priced nature of the IPO, indicating a P/E multiple of 34.8 times (to its TTM EPS of ₹12). The brokerage notes that there are no comparable peers with a similar business model to Medi Assist, making the valuation appealing. Considering the company’s dominant share in the TPA market and overall financial health, Choice Broking recommends a ‘Subscribe’ rating.
About the Offer:
- Amount to be Raised: Medi Assist, backed by Bessemer India Capital, aims to raise ₹1,171.6 crore through the public offer.
- Price Band: The price band for the issue is set in the range of ₹397-418 per share.
- Offer Details: The IPO consists solely of an offer-for-sale (OFS), where existing shareholders, including promoters and investors, plan to sell 2.8 crore shares. The net proceeds from the OFS will go to the selling shareholders.
Business Overview: Medi Assist provides TPA services to insurance companies through its wholly-owned subsidiaries – Medi Assist TPA, Medvantage TPA, and Raksha TPA. As a third-party administrator, the company processes health insurance claims and offers various services such as policy administration, customer service, and network management.
For the six months ended September FY24, the consolidated net profit stood at ₹24.3 crore, with revenue increasing to ₹301.9 crore. While the net profit saw a decline, the overall revenue growth reflects the company’s robust performance.
In Shorts: As the IPO opens, investors are faced with the decision of whether to subscribe or not. Analysts point to the unique position of Medi Assist in the TPA industry, its consistent financial performance, and positive growth indicators as factors supporting a ‘Subscribe’ recommendation.
