Aster DM Healthcare IPO Review

Aster DM Healthcare – Background

 

Aster DM Healthcare covers the complete spectrum of healthcare through its 323 establishments spread across 9 countries. The major coverage, this healthcare services provider, falls into the regions of Middle East, India and the Far East.

This health care business has its headquarters in Dubai and has a total of around 20,000 employees along with 2,200+ specialist doctors. At the same time, it works from Kochi as the Indian headquarters office. Furthermore, since 2013, they have expanded into the regions of Jordan, Kuwait and few other middle eastern countries.

Thus, from the geographical presence perspective, you get an idea that it has a reasonable presence in different countries including India. At the same time, some of the upcoming projects include:

• Aster MIMS Hospital, Kannur, Kerala
• Aster Hospital, Trivandrum, Kerala

Now, Aster DM Healthcare is coming up with an IPO this month and if you are someone who does not know how to go ahead and apply for an IPO, it is suggested that you check out this detailed review on how to go for an IPO investment and then How to Apply for an IPO in India.

In the rest of the article, we will check and review specific aspects related to this company and the IPO they are coming up with.

Make sure, you spend reasonable time in understanding all the data points and information discussed so that you know what you are getting into (if you are applying for this IPO).

Aster DM Healthcare – Management

The first thing you must check in a company that you might invest your hard-earned money is the management of the firm, business or corporation. The reason is simple – these are the people who are going to run the business with your money in the future and it makes total sense to see what these people have done in the past.

With this information checked, you will be able to make up your mind that whether the credentials of the management are good enough or not.

Talking about Aster DM Healthcare, here are the details of some of the top management executives:

Dr Azad Moopen

Dr Azad Moopen is the Chairman and Managing Director of Aster DM Healthcare. Apart from taking care of this healthcare business, Dr Azad Moopen has been involved and acknowledged in several other streams of his professional life, including:

• Setting up a charitable foundation, Dr Moopen’s Foundation for extending healthcare charitable benefits to the less privileged.
• honoured by the Government of India with the Padma Shri Award in 2011.
• Healthcare CEO of the Year Award at the CEO Middle East Awards 2015.

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T. J. Wilson

T. J. Wilson is a Director and the Group Head of Aster DM Healthcare. He looks into several areas including:

• Responsible for overseeing the legal,
• Secretarial and governance function,
• Internal audit and the large portfolio of new hospital projects.

He has been a Director of Aster DM Healthcare since April 20, 2009

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 Alisha Moopen

Alisha Moopen is one of the Directors of Aster DM Healthcare and also holds the Chief Executive Officer position in Hospitals & Clinics, GCC. Some of the highlights of her career have been:

• Bachelor’s degree from University of Michigan
• Member of Institute of Chartered Accountants of Scotland
• Worked with Ernst and Young LLP in the past

She has been a Director of Aster DM Healthcare since September 20, 2013

On a generic basis, the credentials, especially that of the chairman and managing director look highly promising with reasonable experience and visibility in the field of healthcare.

Aster DM Healthcare IPO – Data Points

Moving forward from the company introduction part, let’s look at some of the specific data points pertaining to Aster DM Healthcare IPO and understand the specific meaning of each of these information pieces.

With a mammoth IPO size of ₹1,100 Crore, Aster DM Healthcare is going to be one of the biggest IPOs this year, as far as the capital to be raised is concerned. It’s going to open on 12th February 2018 and will remain open for bidding for 3 days until 15th February 2018.

A total of 4,03,220,324 equity shares will be opened up with 35% retail allocation.

The face value of each share is going to be ₹10. Rest of the details including the bid price and the lot size will be disclosed very soon.

The bid price has been finalized in the range of ₹180 to ₹190 bracket with a lot size of 78 shares. Investors can bid for more lots in the multiple of 78 post that bid. As a retail investor, you would know, that there is a cap of ₹2 Lakh on the total bidding amount.

Aster DM Healthcare – Financial Performance

Over the last few years, Aster DM Healthcare has seen a consistent growth in revenue as well as profitability. However, in the recent past, due to its aggressive focus on geographical growth as well as R&D, there have been few inconsistencies in its financial sheets.

For instance, the profit for the FY2016 saw a sudden dip to ₹8.2 Crore while it used to see a 50%+ profit increase in the years before that.

Furthermore, even the revenue for the FY2017 saw no growth and this can be a worry for some of the investors. In fact, this can make people raise questions about the timing of the IPO as well.

Here are all the financial details of Aster DM Healthcare for the last 5 financial years or so:

 

Furthermore, if we go ahead and compare Aster DM Healthcare through some of the crucial metrics, the picture will become much clearer.

 

To go a bit deeper, let’s see what each of these metrics imply and how Aster DM Healthcare fares against some of its peer competition:

EPS or Earning Per Share: is one of the most crucial metrics that assist us in knowing how much profit per share is potentially provided to the shareholder. Although it depends on the shares outstanding as well and it must not be looked in isolation. Still, the EPS of Aster DM Healthcare does not leave much of a great impression when compared with other companies from the same industry.

PE Ratio tells you how much you would need to pay in order to gain a part in company’s profit. And obviously, lower the PE ratio, better it is for the investor. PE for Aster DM Healthcare will be shared soon although the competition has a varied range.

RoNW: or Return on Net Worth is most likely one primary factor that people might think this IPO to be a lucrative one. However, make sure you do not look at this metric in isolation too. Nonetheless, Aster DM Healthcare offers one of the best RoNW values.

NAV or Net Asset Value is another important metric to check before you invest your hard-earned money in a company. Since each of the peers come from the same industry, thus, comparing NAV values does make sense. And looking at the numbers, Aster DM Healthcare does not show much of a promise.

Thus, looking at all these numbers together, it seems that Aster DM Healthcare is a light-asset company (there is a possibility, they have high liabilities too) with okayish earnings per share. RoNW is good, but betting on a company based on a single metric can be too much to expect.

In simpler terms, the numbers do not weave a good picture for this company overall.

Aster DM Healthcare IPO Objective

This ₹1,100 Crore Aster DM Healthcare IPO is being introduced for the following reasons:

• Repayment (and pre-payment) of the debts taken at different points in time (₹557.3 Crore)
• General Corporate Purposes
• New Medical equipment to be purchased (₹110.3 Crore)
• New Medical facilities to be built

Well, since the Aster DM Healthcare IPO size is pretty big, so are the plans associated with the usage of those funds as well. From clearing off some of the debts to buying and building new medical equipment/facilities, all that is covered in this IPO.

Aster DM Healthcare IPO Events

Here are the specific details on the timelines of this upcoming Aster DM Healthcare IPO. Make sure that you are aware of these dates to avoid missing any of the specific events in the overall schedule.

 

Aster DM Healthcare – Contact Information

You can get in touch with the company support through multiple channels in case you want to reach out:

Aster DM Healthcare Limited
IX/475L, Aster Medcity
Kuttisahib Road
Near Kothad Bridge
South Chittoor P.O.
Cheranalloor, Kochi – 682 027
Ernakulam, Kerala, India
Tel: +91 484 6699 999
E-mail: investors@asterdmhealthcare.com

Aster DM Healthcare IPO – Our Recommendation

Finally, if we talk about recommending this Aster DM Healthcare IPO for investments – honestly, it is going to be tough!

The numbers discussed above do no promise an amazing listing price. FY2016 saw an abrupt decrease in the net profit while it almost regained to its 2-year net profit position in FY2017 (details of this trend to be discussed soon).

Our suggestion is to let this one pass!

Still, if you would like to invest, you may choose to do so.

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* The recommendation is just our viewpoint and you are advised to check with your financial advisory and/or stockbroker before investing any money in this IPO. A Digital Blogger bears no responsibility in such investments and the corresponding profits/losses.