Park Medi IPO review (Not Rated)

•    The company is the second largest private hospital chain in North India with an aggregate bed capacity of 3000+ beds.
•    The company marked a setback for FY24 following its new acquisitions of hospitals.
•    With its plans to acquire stressed asset and turn them profitable within a year has paid rewards in the form of higher margins.
•    Based on its recent financial data, the issue appears fully priced.
•    Investors may grab it for medium to long term.

ABOUT COMPANY:
Park Medi World Ltd. (PMWL) is the second largest private hospital chain in North India with an aggregate bed capacity of 3,000 beds, and the largest private hospital chain in terms of bed capacity in Haryana with 1,600 beds located in the state as of March 31, 2025. (Source: CRISIL Report) The company operates a network of 14 NABH accredited multi-super specialty hospitals under the ‘Park’ brand, of which eight hospitals are also NABL accredited, with eight hospitals in Haryana, one hospital in New Delhi, three hospitals in Punjab and two hospitals in Rajasthan, each committed to providing high-quality and affordable medical services across a diverse range of specialties. It offers over 30 super specialty and specialty services, including internal medicine, neurology, urology, gastroenterology, general surgery, orthopedics and oncology. As of September 30, 2025, the company had a dedicated team of 1,014 doctors and 2,142 nurses across hospitals, delivering clinical and patient care.

PMWL adopted a cluster based approach to grow its network of hospitals leveraging the benefits of proximity between hospitals leading to operational efficiencies and enabling it to benefit from economies of scale. The hospitals that it acquired accounted for 55.12% of revenue from operations, 54.85% of EBITDA and 61.90% of restated profit after tax in the six months ended September 30, 2025, demonstrating its ability to successfully acquire and integrate hospitals into network.  Its bed capacity increased from 2550 as of March 31, 2023 to 3250 as of September 30, 2025. It has major revenue from Haryana as it is having 1600 bed capacity here followed by Punjab with 900 beds, Rajasthan with 550 beds and Delhi with 200 beds capacity.

The company currently has a pipeline of hospital expansion in Ambala, Panchkula, Rohtak, New Delhi, Gorakhpur and Kanpur. In Ambala, it bought land adjacent to existing hospital and are in the process of increasing bed capacity from 250 beds to 450 beds and set up an onco-radiation facility, which is expected to be operational by October 2027. In Panchkula, it is in the process of constructing a multi super-specialty hospital with a capacity of 300 beds, which is expected to be operational by April 2026, while in Rohtak, the company is constructing a hospital with a capacity of 250 beds, which is expected to be operational by December 2026. In addition, Blue Heavens, a Subsidiary of the Company, submitted a Resolution Plan to the resolution professional appointed in respect of Durha Vitrak under the provisions of the Insolvency and Bankruptcy Code, 2016, for the proposed acquisition of Durha Vitrak (operating as Febris Multi Specialty Hospital, Narela, New Delhi). Pursuant to the NCLT Order, the Resolution Plan was approved.

Park group is known for its modus operand of acquiring stressed assets and turn it profitable within a year. Because of this, its per bed cost is negligible and thus, it earns better margins. Human Resources As of September 30, 2025, it had a team of 1,014 doctors, 2,142 nurses, 730 medical professionals and 2,025 support staff across its hospitals. 

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route combo IPO worth Rs. 920.00 cr. (approx. 56790123 equity shares of Rs. 2 each at the upper cap). The issue comprises of fresh equity issue worth Rs. 770.00 cr. (approx. 47530864 shares at the upper cap) and an Offer for Sale (OFS) of 9259259 equity shares (worth Rs. 150.00 cr. at the upper cap). The company has announced a price band of Rs. 154 – Rs. 162 per equity shares of Rs. 2 each. The issue opens for subscription on December 10, 2025, and will close on December 12, 2025. The minimum application to be made is for 92 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE and NSE. The issue constitutes 13.15% of the post-IPO paid-up equity capital. From the net proceeds of the fresh equity issue, the company will utilize Rs. 380.00 cr. for repayment/prepayment of outstanding borrowings in full or part, Rs. 60.50 cr. for capex on development of new hospital and expansion of existing hospital of its subsidiary Park Medicity, Rs. 27.46 cr. for capex on purchase of medical equipment for the company and its subsidiaries, and the rest for inorganic growth as well as general corporate purposes.

The four Book Running Lead Managers (BRLMs) to this issue Nuvama Wealth Management Ltd., CLSA India Pvt. Ltd., DAM Capital Advisors Ltd., Intensive Fiscal Services Pvt. Ltd., while KFin Technologies Ltd., is the registrar to the issue. Sharekhan Ltd. and Nuvama Wealth Management Ltd. are the syndicate members.

After issuing initial equity shares at par, the company has issued further equity shares at a fixed price of Rs. 20 per share (based on FV of Rs. 2), in November 2011. It has also issued bonus shares in the ratio of 30 for 1 in October 2019, 1 for 1 in March 2021, and 3 for 1 in February 2022. The average cost of acquisition of shares by the promoters/selling stakeholders Rs. 0.07, and Rs. 0.08 per share.

Post-IPO, its current paid-up equity capital of Rs. 76.88 cr. will stand enhanced to Rs. 86.39 cr. Based on the upper cap of the IPO price band, the company is looking for a market cap of Rs. 6997.28 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has (on a consolidated basis) posted a total income/net profit, of Rs. 1272.18 cr. / Rs. 228.19 cr. (FY23), Rs. 1263.08 cr. / Rs. 152.01 cr. (FY24), and Rs. 1425.97 cr. / Rs. 213.22 cr. (FY25). For H1 of FY26 ended on September 30, 2025, it earned a net profit of Rs. 139.14 cr. on a total income of Rs. 823.39 cr. The company marked setback in its profits for FY24 on account of hire provisions for cost of finance, depreciation and amortization towards acquisition of hospitals in the said year.

For the last three fiscals, the company has posted an average EPS of Rs. 5.08 and an average RoNW of 21.79 %. The issue is priced at a P/BV of 5.4 based on its NAV of Rs. 30.00 as of September 30, 2025, and at a P/BV of 3.64 based on its post-IPO NAV of Rs. 44.52 per share (at the upper cap).

If we attribute FY26 annualized earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at negative P/E of 25.16.  Based on FY25 earnings also, the P/E stands at 32.79. Thus, the issue appears fully priced. 

The company has posted PAT margins of 18.19% (FY23), 12.35% (FY24), 15.30% (FY25), 17.21% (H1-FY26), and RoCE margins of 26.78%, 16.07%, 17.47%, 9.55%, respectively, for the referred periods.

DIVIDEND POLICY:
The company has not declared any dividends for the referred periods of the offer document. It has already adopted a dividend policy in March 2025, based on its financial performance and future prospects.

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown Apollo Hospitals, Fortis Healthcare, Narayana Hrudalaya, Max Healthcare, Krishna Institute, Global Health, Jupiter Life, Yatharth Hospital, as its listed peers. They are currently trading at a P/E of 61.8, 66.6, 46.1, 75.8, 85.7, 52.3, 47.3, and 43.4 (as of December 05, 2025). However, they are not truly comparable on an apple-to-apple basis. This comparison appears to be an eyewash.

MERCHANT BANKER’S TRACK RECORD:
The four BRLMs associated with the offer have handled 57 pubic issues in the past three fiscals, out of which 17 issues closed below the offer price on the listing date.