Shalby IPO subscribed 20 percent on Day 1

New Delhi: The initial public offer of Shalby Ltd, an Ahmedabad-based multi-specialty hospital chain, was subscribed 20% on the first day of the three-day bidding.

The IPO, which aims to raise Rs 504 crore, received bids for over 29.32 lakh shares against the total issue size of more than 1.45 crore scrips, indicating a subscription of 20%, data available with National Stock Exchange (NSE) showed. The initial share sale of Shalby will be open for public subscriptions until December 7.

Shalby, yesterday, raised over Rs150 crore from anchor investors.

The IPO comprises a fresh issue of equity shares aggregating up to Rs480 crore and an offer for sale of up to 10 lakh equity shares by the selling shareholder. The price band has been fixed at Rs245-248 per share. At the upper end, the public issue would fetch Rs504 crore.

Proceeds of the IPO will be utilized towards repayment of borrowings availed by the company besides purchasing medical equipment for existing, recently set-up as well as upcoming hospitals.

Shalby also said it is looking at expansion in the eastern and North-eastern region.

"We are looking for an opportunity for our presence in eastern region locations like Bhubaneshwar and Kolkata. However, nothing has been finalized yet," Shalby CEO Ravi Bhandari said on the sidelines of a roadshow for its maiden IPO.

"In metros, we will expand with a super-speciality hospital but in an asset-light model," he said.

Shalby has been expanding rapidly through tie-ups in which the hospital brand does not want to own reality to keep costs low. The company was also open to managing existing hospitals.

A tie-up up with a Guwahati hospital for offering orthopaedic co-branded services like a shop-in-shop concept," Bhandari said.

Currently, the hospital has nine operational hospitals and claimed to have 15 percent market share of all joint replacement surgeries conducted by private corporate hospitals in India in 2016.

In the recent months, healthcare services firms Alkem Laboratories, Dr. Lal Pathlabs, Narayana Hrudayalaya, Thyrocare and Eris Lifesciences have tapped the primary market through IPO route.