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Aatmaj Healthcare

• Aatmaj Healthcare is coming out with an initial public offering (IPO) of 64,00,000 equity shares of face value of Rs 5 each for cash at a fixed price of Rs 60 per equity share.
• The issue will open for subscription on June 19, 2023 and will close on June 21, 2023.
• The shares will be listed on NSE Emerge.
• The share is priced 12.0 times higher to its face value of Rs 5.
• Book running lead manager to the issue is Nirbhay Capital Services.
• Compliance Officer for the issue is Radhika Hissaria.

Profile of the company

The company is a growing organization that aims at strengthening and establishing it’s self as the foremost healthcare services provider. It strives to serve with its ultra-modern medicinal practices and state of the art infrastructure for medical as well as surgical care solutions. It aims towards continuous improvement of its healthcare facilities and to achieve the level of care and quality, it has constituted committees such as Quality Assurance and Safety Committee, Infection Control Committee, CPR Committee, Pharmacy and Therapeutic Committee, Blood Transfusion Committee, Committee for Medical Records and Women’s Safety Committee. It has a team of medical practitioners who ensures that patients get the quality healthcare services. Its dedicated team is trained to take care of the patients and handle health related emergencies. Its healthcare staff members comprise of Unit Head, Consultant Doctors, Clinical Pharmacist, X-Ray Technician, Microbiologist, Medical Officers, Clinical Assistants, Medical Executives, OT Assistant, Infection Control Nurse, Other Nursing Staff, Attendants, Maintenance Head, Dietician/Nutritionist etc.

It is a part of Ayushman Bharat-Pradhan Mantri Jan ArogyaYojana, a flagship scheme of Government of India which was launched and recommended by the National Health Policy 2017, to achieve the vision of universal health coverage (UHC). The initiative has been designed on the lines as to meet SDG and its underlining commitment. Ayushman Bharat is an attempt to move from sectoral and segmented approach of health service delivery to a comprehensive need-based health care service and Mukhyamantri Amrutam (MA) scheme is launched by Gujarat state to cater families below the poverty line.

Proceed is being used for:

• Repayment/Prepayment in full or part of existing secured debt of the company.
• Funding the working capital requirements of the company.
• Purchase of medical equipments for hospitals of the company and/or newly acquired or set up hospitals.
• Its inorganic growth initiatives through acquisitions and other strategic initiatives.
• General corporate expenses.
• Issue expenses.

Industry overview

The Indian healthcare sector is expected to record a three-fold rise, growing at a CAGR of 22% between 2016 - 2022 to reach $372 billion in 2022 from $110 billion in 2016. As of February 20, 2023, more than 220.63 crore COVID-19 vaccine doses have been administered across the country. By FY22, Indian healthcare infrastructure is expected to reach $349.1 billion. India climbed to the 63rd rank among 190 countries in the World Bank’s ‘Ease of Doing Business’ rankings in 2020. As of 2021, the Indian healthcare sector is one of India’s largest employers as it employs a total of 4.7 million people. The sector has generated 2.7 million additional jobs in India between 2017 - 2022 over 5,00,000 new jobs per year.

India’s healthcare sector is extremely diversified and is full of opportunities in every segment, which includes providers, payers, and medical technology. With the increase in the competition, businesses are looking to explore the latest dynamics and trends which will have a positive impact on their business. The hospital industry in India is forecast to increase to Rs 8.6 trillion by FY22 from Rs 4 trillion in F.Y 2016-17 at a CAGR of 16 -17%.

India is a land full of opportunities for players in the medical devices industry. The country has also become one of the leading destinations for high-end diagnostic services with tremendous capital investment for advanced diagnostic facilities, thus catering to a greater proportion of the population. Besides, Indian medical service consumers have become more conscious towards their healthcare upkeep. Rising income levels, an ageing population, growing health awareness and a changing attitude towards preventive healthcare is expected to boost healthcare services demand in the future. Greater penetration of health insurance aided the rise in healthcare spending, a trend likely to intensify in the coming decade. 

Pros and strengths

Quality standards: Quality plays one of the most vital role in the success of any organization. It is committed to delivering the best standards of healthcare. Its healthcare facilities consist of advanced technology and its doctors, nurses and other healthcare professionals who follow treatment protocols that match acceptable standards.

Experienced and professional management team: It considers that its qualified and professional management team provides it a competitive advantage and enables it to function effectively and efficiently. Its management team, starting from the Promoters of the company has very rich experience and professionalism in the healthcare industry. Its big team of physicians, specialists and surgeons are hailed for their international experience and expertise. With their immense experience and knowledge, it is committed to delivering the best standards of healthcare.

spending, a trend likely to intensify in the coming decade. 

Pros and strengths

Quality standards: Quality plays one of the most vital role in the success of any organization. It is committed to delivering the best standards of healthcare. Its healthcare facilities consist of advanced technology and its doctors, nurses and other healthcare professionals who follow treatment protocols that match acceptable standards.

Experienced and professional management team: It considers that its qualified and professional management team provides it a competitive advantage and enables it to function effectively and efficiently. Its management team, starting from the Promoters of the company has very rich experience and professionalism in the healthcare industry. Its big team of physicians, specialists and surgeons are hailed for their international experience and expertise. With their immense experience and knowledge, it is committed to delivering the best standards of healthcare.

Well diversified and specialty service offerings: Its operations encompass various levels of healthcare services from primary to tertiary and position it to be a one stop destination for patients’ needs once they enter its hospital. In addition to providing core medical, surgical and emergency services, it also offer advanced surgical treatments in various specialties including cardiology, oncology, radiology, neurosciences, paediatrics, gastroenterology, orthopaedics and critical care services. It is investing significantly in the technology, equipment and infrastructure required to perform the most advancedprocedures and to strengthen its specialty focus.

Risks and concerns

Face intense competition: It operates in a competitive environment. In most markets, it competes with hospitals, clinics, diagnostic chains and dispensaries of varying sizes with different specialties. It competes on the basis of factors such as its specialty and other service offerings, quality and selection of healthcare professionals, affordability, quality of care, technology, quality of facilities, patient satisfaction, brand and reputation. Its pharmacies in its hospitals compete on factors such as price and product offerings. Some of its multi-specialty competitors offer services that it do not offer. Some of its competitors are owned or operated by governmental bodies or by private not-for-profit entities supported by endowments and charitable contributions, which can finance capital expenditures without incurring significant tax obligations. It may also face competition from new market entrants, healthcare companies which may enter the Indian market in the future.

Dependent on number of key personnel: It depends on its Promoters and Key Managerial Personnel to maintain strategic direction, manage the operations and meet the business challenges that may arise in future related to the business. The loss of, or inability to attract or retain, such persons could materially and adversely affect its business and financial results. Its Promoter, Key Managerial Personnel and Senior Management have been integral part of the company for the development of the business. It may also be required to increase its levels of employee compensation more rapidly than in the past to remain competitive in attracting skilled employees that its business requires. If it is unable to hire and train replacement personnel in a timely manner or increase its levels of employee compensation to remain competitive, its business, financial results, results of operations and cash flows may be materially and adversely affected. 

Unable to keep pace with technological changes: The healthcare services industry is characterized by periodic technological changes, new equipment and service introductions, changes in patients’ needs and evolving industry standards, including, for example, changes associated with diagnosis process, treatments and patient-doctor interactions in telemedicine offerings. The upgradation involves capital expenditures on the acquisitions of medical equipment’s it may not be able to recover such capital expenditures within reasonable time. It may incur significant repair and maintenance costs and may experience disruptions in its operations in the event of any material malfunction or breakdown of its equipment in the future.

Outlook

The company is a growing organization that aims at strengthening and establishing it’s self as the foremost healthcare services provider. It strive to serve with its ultra-modern medicinal practices and state of the art infrastructure for medical as well as surgical care solutions. On the concern side, it operates in a competitive environment. In most markets, it competes with hospitals, clinics, diagnostic chains and dispensaries of varying sizes with different specialties. It competes on the basis of factors such as its specialty and other service offerings, quality and selection of healthcare professionals, affordability, quality of care, technology, quality of facilities, patient satisfaction, brand and reputation. 

The company is coming out with an IPO of 64,00,000 equity shares of Rs 5 each at a fixed price of Rs 60 per share to mobilize Rs 38.40 crore. On performance front, the total revenue of the company was increased to Rs 2180.88 lakh in financial year 2021-22 as against Rs 1725.89 lakh in the financial year 2020-21. It represents increase of 26.36% which was mainly due to increase in volume of operation during the financial year 2021-22 which was due to increase in patients due to Covid-19 pandemic. Profit after tax was increased to Rs 492.07 lakh in financial year 2021-22 from profit of Rs. 412.19 lakh in the financial year 2020-21. This increase was mainly due to increase in overall total revenue. 

Going forward, it aims to continue to be one of the leading healthcare service providers in India through strategic acquisitions and O&M arrangements with third party healthcare service providers. Towards this, it intends to strengthen its hospital presence in the state of Gujarat. Every opportunity for expansion is viewed against the background of various factors such as local demography, catchment area served, gentry and spending capacity, growth rate of population, patient flow, availability of local partners, location of the property, expected investment, financial returns, local competition, and the availability of local talent. Expansion of its network of hospitals will be undertaken through a combination strategic acquisitions and O&M arrangements with third party healthcare service providers. It will continue to focus on cities with high growth rate