IPO Note : Inventurus Knowledge Solutions Ltd By Geojit Financial Services Ltd
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A Digital Healthcare Solution Provider
Inventurus Knowledge Solutions Ltd. (IKSL), founded in 2006, is a tech-driven healthcare solutions provider focused on the US market. IKSL’s care enablement platform supports healthcare enterprises in the US, Canada, and Australia by streamlining administrative, clinical, and operational tasks, enhancing clinical outcomes, optimizing revenue, reducing burnout, and enabling value-based care through digital health solutions. As of September 30, 2024, IKSL served 778 healthcare organization.
* The US health provider enablement technology market is projected to reach $323 billion by 2028, driven by a growing supply-demand gap among healthcare professionals, shrinking margins, and rising healthcare consumerism.
* In October 2023, IKSL acquired Aquity Holdings, a provider of technologydriven clinical documentation, medical coding, and revenue integrity solutions. The acquisition enables IKSL to cross-sell to Aquity’s 804+ customers (as of March 31, 2024) and expand its market reach.
* Prior to acquiring Aquity, IKSL operated exclusively in the United States and India. The acquisition expands IKSL's reach to Australia and Canada.
* IKSL’s revenue model is based on i. a percentage of payments collected by clients, ii. transaction volume, and iii. monthly fees (e.g., per physician). IKSL benefits as clients grow by acquiring medical groups, opening clinics, hiring physicians, and increasing patient volumes.
* The company’s scalable business model enables it to expand operations without proportionately increasing costs, enhancing profitability.
* IKSL’s revenue grew from Rs.764cr in FY22 to Rs.1,818cr, at a CAGR of 54%, while PAT rose 26% CARG to Rs.371cr. In FY24, EBITDA margin stood at 28% while PAT margin is 20.4%.
* IKSL’s client base has grown from 45 clients, in FY22 to 49 clients in FY23. After the acquisition of Aquity Holdings, in FY24, they had 853 clients.
* At the upper price band of Rs.1329, IKSL is available at a P/E of 54.6x (on FY25 Annualised), which appears fairly priced. Considering its asset light and scalable model with high margin operations, diversified product offerings, significant expansion potential post acquiring Aquity Holdings, we recommend Subscribe rating to the issue on a medium to long term basis.
Purpose of IPO
The IPO consists of an offer for sale of Rs.2497.9cr by selling shareholders. The company will not receive any proceeds from the offer and all such proceeds will go to the selling shareholders.
Key Risks
* Reliance on the US market, as 95.8% of total revenue in H1 FY25 was generated from US customers.
* Inability to successfully integrate recently acquired Aquity Holdings.
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SEBI Registration Number: INH200000345
