Manipal Health shares list at 11% premium to beat GMP estimates. What should allotted investors do?

Shares of Manipal Health Enterprises made a strong stock market debut on Wednesday, listing at Rs 655, a premium of 11% over its issue price of Rs 590. The listing far outpaced grey market expectations, which had signalled a modest 1% premium before the debut.

The company's Rs 9,275.22 crore IPO was subscribed 4.92 times overall. The public issue comprised a fresh issue of 13.56 crore equity shares worth Rs 8,000 crore and an offer for sale of 2.16 crore shares aggregating Rs 1,275.22 crore, taking the total issue size to Rs 9,275.22 crore.

What should investors do?

Shivani Nyati, Head of Wealth at Swastika Investmart, said despite the positive listing, the stock is trading at a premium valuation with limited margin of safety. A major portion of the IPO proceeds will be used to repay acquisition debt, leaving limited funds for future expansion, while the company also remains highly dependent on Karnataka, which contributes nearly 46–60% of its revenue.


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“Investors who received the allotment can continue to hold the stock, while fresh investors should wait for better entry levels or signs of further debt reduction before buying. Maintain a stop-loss at Rs 620 to protect listing gain,” she added.

Angel One said the upper price band of Rs 590, the brokerage said the issue is valued at a post issue FY26 P/E of 84.65 times, which it considers expensive. While it acknowledged the company's strong pan India hospital network, leadership in key markets and favourable long term industry prospects, it believes the rich valuation already captures much of the expected growth. As a result, it recommends a Neutral stance for medium to long term investors despite the company's strong fundamentals.

SBI Securities, which has assigned a Subscribing for long-term rating, said the company is India's largest multi-speciality healthcare provider by bed capacity and holds leadership positions across key metro cities.

It also cited Manipal Health's strong track record of strategic acquisitions, which have helped expand scale, improve operating leverage, widen its geographic presence and strengthen its competitive position.

Over FY26 to FY30, the company plans to add 2,426 beds, including 1,943 through greenfield projects and 483 through brownfield expansion. SBI Securities also expects profitability to improve on the back of the Sahyadri Group integration and lower interest costs following debt repayment using 69% of the IPO proceeds.

At the upper price band of Rs 590, the brokerage said the issue is valued at an EV/EBITDA of 29.4 times based on FY26 proforma earnings on a post issue basis, which it considers fairly valued compared with peers.

Emkay says the current valuation discount reflects the company's relatively lower return profile and a more modest bed expansion pipeline over the next two to three years.

How will Manipal use IPO proceeds?

The company plans to allocate a significant portion of the fresh issue proceeds towards strengthening its financial position.

Around Rs 5,378 crore from the IPO proceeds will be used for debt repayment, helping reduce borrowing costs and improve the balance sheet. Another Rs 574 crore is planned for acquiring a minority stake in its step-down subsidiary, Sahyadri Hospitals.

The remaining funds will be utilised for general corporate purposes and supporting future expansion plans.

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Founded in 2010, Manipal Health Enterprises has emerged as one of India’s leading healthcare providers, with a wide network of multi-speciality hospitals, clinics and diagnostic centres.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)