IGI Logo

Manipal Health Enterprises (MHEL), founded on the Pai family's legacy in medical education, is India's largest pan-India multispecialty hospital network by bed capacity—49 hospitals and 13,037 licensed beds across 14 states/UTs as of Mar26. Overall, the company has a strong pan-India presence, with leadership position in Bengaluru (~2.6k beds), Kolkata (~1.5k), and Pune (~1.3k). MHEL has clocked revenue/EBITDA CAGR of 31%/29%, respectively, over FY23-26. However, with bed expansion primarily led by acquisitions at premium valuations (Sahyadri acquisition at Rs42mn per bed), MHEL generates a lower-than-industry average ROCE of ~13% (calculated). At the upper price band of Rs590, the company is valued at ~30x FY26 EV/pre-IndAS EBITDA (post-money) – ~15% discount to sector average.

Pan-India footprint, with leadership in key Tier-1 markets

MHEL has built a pan-India footprint, with leadership position in South India (53% of bed capacity), followed by East (22%) and West (17%) India. It is the largest operator in Karnataka/Maharashtra/East India cluster, with ~6.4k/2.2k/2.9k beds, respectively. The network is skewed deliberately toward accessibility, with ~54% of beds in Tier-2/3 cities. Additionally, as part of the expansion pipeline, the management plans for ~483 brownfield (~20% of bed adds) and ~1,943 greenfield (~80%) bed additions by FY30, keeping Maharashtra, Karnataka, and East India as key focus regions

Repeatable playbook for integrating acquisitions and scaling rapidly

Growth for MHEL has extensively been around non-core markets, with 5.5k beds added inorganically since FY21—the most among Indian private chains—via Columbia Asia (~1.4k beds acquired in Apr-21), Vikram, AMRI (~1.3k beds acquired in Sep-23), Medica Synergie (~1k beds acquired in Apr-24), and Sahyadri (~1.4k beds acquired in Jul-25), with a demonstrated record of successfully integrating acquisitions and improving profitability. Columbia Asia (12 hospitals, acquired in FY22 for Rs17.9bn) was repositioned from secondary to quaternary care, lifting EBITDA margin from 27.4% (FY23) to 33.8% (FY26). AMRI (4 hospitals, Kolkata/Bhubaneswar) saw EBITDA margin improve from 19.5% to 21.8% within two years of acquisition. With the acquisition of Sahyadri Hospitals (10 hospitals, ~1.4k beds; Jul-25), MHEL secured leadership in Pune while establishing a meaningful West India footprint. While these acquisitions compressed go-to-market timelines (vs greenfield), MHEL has had to pay significant premiums for the same (Sahyadri acquired at Rs42mn/bed).

Valuation discount to sector average bakes in muted return profile

The current IPO aims to raise Rs80bn via a fresh issue and Rs13bn via OFS at the upper end of the price band. Fresh issue proceeds will be primarily utilized for debt reduction (Rs56bn) and acquisition of a minority stake in Sahyadri (Rs6bn). MHEL is valued at a ~15% discount to sector average at the upper end of the price band (post-money), likely on the back of a lower return profile and a comparatively smaller expansion pipeline of bed additions over the next 2-3 years.

For More  Emkay Global Financial Services Ltd Disclaimer http://www.emkayglobal.com/Uploads/disclaimer.pdf & SEBI Registration number is INH000000354