KIMS Shares Make Strong Debut Listing at a 22% Premium

Shares of Krishna Institute of Medical Sciences (KIMS) made a strong debut on the stock exchanges today.

Shares listed at Rs 1,008.90 on the BSE, a 22.29% premium over its issue price of Rs 825. On the NSE, the stock listed at Rs 1,009, up 22.30% from issue price.

Post listing, KIMS shares soared to Rs 1,059.

However, shares of the company pared some of its gains to end at Rs 1,006.

The company now commands a marketcap of Rs 80.6 bn.

KIMS IPO gets Ashish Kacholia interested

Renowned investor Ashish Kacholia had placed an application for over 2 m shares, worth about Rs 1.8 bn in the initial public offer (IPO) of KIMS Hospitals.

Ashish Kacholia is known for his bets on mid-cap and small-cap stocks.

Birlasoft, Mastek, Poly Medicure, Apollo Tricoat Tubes, Phillips Carbon, and Caplin Point are some of his top holdings.

The Rs 21.4 bn IPO was open for subscription between 16 June and 18 June. This included a little over Rs 9.6 bn, that was mobilised from anchor investors.

The IPO saw strong response as the offer received bids for 55,655,046 shares compared with 14,413,073 shares on offer.

The quota reserved for qualified institutional buyers (QIBs) was subscribed 5.26 times while the one for non-institutional investors received 1.89 times bids.

Retail investors also showed strong participation as the quota reserved for them was subscribed to 2.89 times.

Grey market premium holds

Ahead of its listing, KIMS shares were trading at a premium of Rs 110 or at a price of Rs 935 in the grey market.

Shares were expected to list at premium to its issue price given the strong response seen from investors.

The strong listing can be attributed to a decent performance last week by Shyam Metalics and Sona Comstar.

Last week, Shyam Metalics listed at Rs 380, a 24.2% premium over its issue price of Rs 306.

Meanwhile, Sona BLW Precision Forgings listed at Rs 302.4, a 3.9% premium to issue price of Rs 291 per share. Later in the day, shares of the company were locked in the 20% upper circuit on the back of strong demand.

On top of all this, market sentiment also had a role to play. Benchmark indices BSE Sensex and NSE Nifty opened at record highs today before paring gains.

Indian share markets rose to record highs tracking the positive US stock markets and mixed Asian shares.

Market experts are suggesting KIMS shareholders to hold the stock, showing emphasis on the company's financials and the fact that HNI and mutual fund houses are expected to buy stake in the company from the secondary market.

Covid Impact

Despite a surge in topline and bottomline, KIMS said that the Covid-19 pandemic had an adverse impact on its operations.

In March 2020 and more so in April 2020, it witnessed a substantial decline in in-patient and out-patient volumes.

When compared to February 2020, its inpatient volumes fell by more than half in April 2020.

This was because some patients were reluctant to visit hospitals due to a perceived notion of increased risk of infection.

Further, the dependence of KIMS on hospitals in Hyderabad is also a concern.

The company also competes with strong peers such as Apollo Hospitals, Fortis Healthcare, and Aster DM Healthcare, among others.

About Krishna Institute of Medical Sciences

Incorporated in 1973, Krishna Institute of Medical Sciences (KIMS) is one of the largest healthcare groups in Andhra Pradesh and Telangana.

KIMS provides multi-disciplinary healthcare services with a key focus on primary, secondary, and tertiary care in tier 2-3 cities.

The company offers a comprehensive range of healthcare services including oncology, cardiac sciences, neurosciences, gastric sciences, orthopedics, renal sciences, organ transplantation, and mother & child care.

As of 31 March 2021, it operates through 9 multi-specialty hospitals under the brand name of 'KIMS Hospitals' with an aggregate bed capacity of 3,064 including over 2,500 operational beds.

After the listing of KIMS shares at BSE and NSE, promoters' holding in the company now stands at 38.84%, which was at 46.81% before the issue listing.

It remains to be seen how the stock performs going forward.

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