Jupiter Life Line Hospitals IPO gets 30% Anchor allocated

About the Jupiter Life Line Hospitals IPO

The anchor issue of Jupiter Life Line Hospitals IPO saw a relatively strong response on 05th September 2023 with 30% of the IPO size getting absorbed by the anchors. Out of the 1,18,24,163 shares (118.24 lakh shares approximately) on offer, the anchors picked up 35,47,247 shares (35.47 lakh shares approximately) accounting for 30% of the total IPO size. The anchor placement reporting was made to the BSE late on Monday, 05th September 2023; a day ahead of the IPO opening. The IPO of Jupiter Life Line Hospitals Ltd opens on 06th September 2023 in the price band of ₹695 to ₹735 and will close for subscription on 08th September 2023 (both days inclusive).

The entire anchor allocation was made at the upper price band of ₹735. This includes the face value of ₹10 per share plus a premium of ₹725 per share, taking the anchor allocation price to ₹735 per share. Let us focus on the anchor allotment portion ahead of the Jupiter Life Line Hospitals Ltd IPO, which saw the anchor bidding opening and also closing on 05th September 2023. Before that, here is how the overall allocation will look.

The overall allocation to QIBs includes the anchor portion, so the anchor shares allotted will be deducted from the QIB quota for the purpose of the public issue.

Finer points of anchor allocation process

Before we go into the details of the actual anchor allotment, a quick word on the process of anchor placement. The anchor placement ahead of an IPO/FPO is different from a pre-IPO placement in that the anchor allocation has a lock-in period of just one month, although under the new rules, part of the anchor portion will be locked in for 3 months. It is just to give confidence to investors that the issue is backed by large established institutions.

However, the anchor investors cannot be allotted shares at a discount to the IPO price. This is explicitly stated in the SEBI revised regulations as under, “As per the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2018, as amended, in case the Offer Price discovered through book building process is higher than the Anchor Investor Allocation Price, then the Anchor investors will be required to pay the difference by the pay-in as specified in the revised CAN.

An anchor investor in an IPO is normally a qualified institutional buyer (QIB) like a foreign portfolio investor or mutual fund or insurance company or a sovereign fund which invests before the IPO is made available to the public as per SEBI regulations. Anchor portion is part of the public issue, so the IPO portion to the public (QIB portion) is reduced to that extent. As initial investors, these anchors make the IPO process more attractive for investors, and instil confidence in them. Anchor investors also largely aid in price discovery of the IPO

Anchor placement story of Jupiter Life Line Hospitals IPO

On 05th September 2023, Jupiter Life Line Hospitals IPO completed the bidding for its anchor allocation. There was a strong and robust response as the anchor investors participated through the process of book building. A total of 35,47,247 shares were allotted to a total of 39 anchor investors. The allocation was done at the upper IPO price band of ₹735 (including premium of ₹725 per share) which resulted in an overall allocation of ₹260.72 crore. The anchors have already absorbed 30% of the total issue size of ₹869.08 crore, which is indicative of fairly robust institutional demand.

Listed below are the 14 anchor investors who got allotted shares which was more than 3% of the anchor allocation quota for the Jupiter Life Line Hospitals IPO. The entire anchor allocation of ₹260.72 crore was spread across these 39 major anchor investors, of which 14 anchor investors got allotted more than 3% of the anchor portion. These 14 anchor investors listed below accounted for 63.76% of the total anchor allocation of Jupiter Life Line Hospitals Ltd and their participation will set the tone for retail participation in the IPO. There were a number of anchor allottees with smaller but significant allocations.

Data Source: BSE Filings

While the GMP has surged to a robust level of ₹218, it shows an attractive premium of 29.66% on listing. This has led to reasonable anchor response with the anchors taking in 30% of the total issue size. The QIB portion in the IPO will be reduced to the extent of the anchor placement done above. Only the balance amount will be available for QIB allocation as part of the regular IPO.

The general norm is that, in anchor placements, smaller issues find it hard to get FPIs interested while larger issues do not interest mutual funds. Jupiter Life Line Hospitals Ltd has witnessed anchor interest from domestic mutual funds, foreign portfolio investors, and even insurance companies.

Jupiter Life Line Hospitals Ltd, in consultation with the book running lead managers (BRLMs) have allocated a total of 16,91,992 shares to domestic mutual funds, spread across 26 mutual fund schemes of 12 mutual fund AMCs. The mutual fund allocation alone is 47.70% of the total anchor book of Jupiter Life Line Hospitals Ltd with an investment value of ₹124.36 crore.

Brief on the Jupiter Life Line Hospitals Ltd business model

Jupiter Life Line Hospitals Ltd was incorporated in the year 2007 as a multi-specialty tertiary and quaternary healthcare provider based predominantly out of Maharashtra. It is strong in the MMRDA and Thane districts and is also present in Pune and Indore. It currently operates 3 hospitals under the "Jupiter" brand located at Thane (near Mumbai), Pune, and Indore with total operational bed capacity of 1,194 beds. In addition, it is in the process of developing a multi-specialty hospital in Dombivli, near Kalyan with 500 beds and has just commenced construction earlier this year. It has over 1,300 doctors empanelled in its staff, which includes specialists, physicians, and surgeons across different medical faculties. Jupiter Life Line Hospitals offers very advanced and sophisticated neuro-rehabilitation services. This is done through dedicated robotic and computer-assisted neuro-rehabilitation techniques. All the hospitals are currently certified by the National Accreditation Board for Hospitals & Healthcare Providers (NABH) and accredited for medical testing by the NABL.

The company's offers inpatient and outpatient treatment across its major hospitals located at Thane, Pune, and Indore. Jupiter Life Line Hospitals is equipped with over 30 specialized treatments including bariatric surgery, dermatology, cardiology, gastroenterology, haematology, neurology, gynaecology, obstetrics, rheumatology, pain care, chest medicine, ENT, infectious diseases, oncology, mental health, orthopaedics, robotic knee replacement, dental care, endocrinology, internal medicine, nephrology, urology, and paediatrics. Over the years, Jupiter Life Line Hospitals Ltd has received various accolades and awards across various specializations. The hospital provides specialized care to patients, including after care as well as it offers specialized treatment facilities for international patients. The IPO of Jupiter Life Line Hospitals Ltd will be lead managed ICICI Securities Ltd, Nuvama Wealth Management Ltd and JM Financial Ltd acting as the book running lead manages (BRLMs). KFIN Technologies Ltd (formerly Karvy Computershare Ltd) will be the registrar to the issue.