InvestorQ : How do you view the listing of Metropolis Healthcare?
swati Bakhda made post

How do you view the listing of Metropolis Healthcare?

Dia Deshpande answered.
2 years ago

The Rs.1204 crore IPO of Metropolis Healthcare listed on the NSE on 15th April 2019 and had a premium listing. The stock listed at a 9% premium to its issue price of Rs.877 and touched a high of Rs.1005. There are a couple of points to remember here. Firstly, it is not a fresh issue and it is only an offer for sale. That means, the existing shareholders are getting an exit route through the IPO and the company is not getting any fresh funds into the company for expansion. Hence that story is not there right now. Secondly, even at the time of the IPO, the stock was priced at 40.3 times P/E Ratio. That has gone up further after the premium listing and does not leave room for further upsides on the stock from current levels.

However, the stock does have some advantages over its peers. Since Metropolis is also in the clinical diagnostics business, its peer group would consist of *** Pathlabs and Thyrocare. Metropolis has better ROE at 24.7% for FY18 compared to 21.6% for Dr *** Pathlabs and 20.4% for Thyrocare Technologies. Metropolis Healthcare has presence across 19 states in India with leadership position in west and south India through its network of 83 clinical laboratories and 1,473 patient touch points. The company is expected to benefit from trickle down orders and fulfilment opportunities for the National Health Scheme. It also offers analytical and support services to clinical research organizations for their clinical research projects. In terms of valuations, the company appears to be fully priced at current levels and short to medium term upsides may be limited.