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Krishna Institute of Medical Sciences Limited (KIMS) IPO opens today i.e 16^th June 2021. The company operates its business in the hospital sector. Based on FY-2021PE of 31.2x and EV/EBITDA of 17.8x at upper band of the IPO price, valuations are very attractive as compared to Narayan Hrudayalaya, Fortis Hospitals and Max Hospitals etc. Along with this company has reported a very good set of numbers for FY2021 which are better than all the peers in the hospital sector.  If we compare KIMS’ return ratios with other peers, then KIMS has one of the best Return of equity (ROE) & Return on capital employed (ROCE) of 23.8% and 24.8% respectively. Hospital business is very capital-intensive and setting up a small hospital of 100 beds requires around ₹100-₹120 crores. Despite this KIMS is able to set up its business with very low levels of debt and has a healthy balance sheet with negative Net Debt/ Equity.

We have assigned a “SUBSCRIBE” recommendation to the KIMS IPO. We suggest investors to apply for the IPO long term as well investors can get good listing gains also.

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