Medi Assist Healthcare IPO Financial Analysis

Medi Assist Healthcare is India's leading health benefits administrator by revenue for fiscal years 2020-2022. It primarily serves insurance companies while acting as an intermediary between (a) insurance companies and their members, (b) insurance companies and healthcare providers, and (c) the Government and beneficiaries of public health schemes, is set to launch its IPO on 15 January 2024. Here's a summary of the company's business model, strengths, weaknesses, and growth prospects to assist investors in making informed decisions

Medi Assist Healthcare IPO Overview

Medi Assist Healthcare Services Ltd, established in 2002, operates as a healthtech and insurance-tech company. It manages health benefits for employers, retail members, and public health schemes, primarily serving as an intermediary for insurance companies. The company facilitates medical insurance and cashless hospitalization through a network of 14,000+ hospitals across 967 cities and towns in 32 states and union territories of India. Collaborating with 36 insurance companies, it generated ₹570.29 million in revenue in the fiscal year ending March 2023

In FY23, Medi Assist settled 5.27 million claims, comprising 2.44 million in-patient claims and 2.83 million out-patient claims. The company plays a pivotal role in the insurance sector by connecting insurance companies, healthcare providers, and policyholders

Medi Assist Healthcare IPO Strengths

1. Company holds the title of India's leading health benefits administrator for retail and group schemes based on revenues and premiums serviced in the fiscal years 2020, 2021, and 2022.

2. Has a scalable and technology-enabled infrastructure that meets the requirements of all participants in the health insurance system.

3. Over time company has leveraged its deep understanding of the Indian health insurance system to establish trust and strengthen its enduring partnerships with different insurance companies.

4. Has set up an extensive network of healthcare providers throughout India, covering 14,301 hospitals in 967 cities and towns across 32 states, including union territories.

5. Long-lasting connections with insurance companies in India

Medi Assist Healthcare IPO Weakness

1. Relies on a few key clients for a large portion of its revenue. If it were to lose one or more of these clients it could impact the company's business and its future outlook.

2. May face challenges and negative impacts on its business, financial condition, and results of operations if it struggles to handle and grow its network of healthcare providers efficiently.

3. Its business is highly dependent on specific industries, and negative developments in these sectors could adversely affect its operations. Additionally any termination or unfavorable changes in relationships with insurance companies or corporate clients may affect the company's financial condition and results

4. Has faced challenges with negative cash flows from its investments and financial activities in the past

Medi Assist Healthcare IPO Details

Medi Assist Healthcare IPO is scheduled from 15 to 17 January 2024. It has a face value of ₹5 per share, and the IPO's price range is ₹297- ₹418per share

Financial Performance of Medi Assist Healthcare IPO

Medi Assist Healthcare Services Ltd maintained fairly consistent profit margins over the years. In the fiscal year ending in 2021, they had a margin of 23.40%, which saw a slight dip to 23.20% in 2022. However, the trend reversed in the fiscal year ending in 2023, with an improvement of 23.60%. Profit margins essentially show how much profit a company retains from its revenue after covering all its expenses

Key Ratios

Over the years, Medi Assist Healthcare Services Ltd showed an improvement in its Return on Equity (ROE), a measure of how well it's generating profits from shareholder investments. In FY21, the ROE was 8.98%, which increased to 18.93% in FY22 and then saw a modest rise to 19.30% in FY23. Suggesting company became more effective in turning shareholder equity into profits during this time

Promoters of Medi Assist Healthcare IPO

1. Dr. Vikram Jit Singh Chhatwal.

2. Medimatter Health Management Private Limited.

3. Bessemer India Capital Holding II Ltd.

The company's current owners (promoters) collectively own 67.55% of it. Dr. Vikram Jit Singh Chhatwal plans to sell his entire 3.69% ownership through an Offer for Sale (OFS). Other promoters, Medimatter Health, will decrease its ownership from 27.94% to 9.83%. However, the third promoter, Bessemer India Holdings, will not be selling any shares. After these changes, the promoters' overall ownership will be reduced to 45.75%.

Final Words

This article takes a closer look into the upcoming Medi Assist Healthcare IPO, scheduled for subscription from 15 January 2024. It suggests that potential investors thoroughly review the company's details, financials, subscription status, and the Grey Market Premium (GMP). GMP indicates the anticipated listing performance, providing valuable insights for investors to make well-informed decisions. On 12 January 2024, Medi Assist Healthcare IPO GMP is ₹64 up from the issue price reflecting a 15.31% increase