IPO Size: Rs. 251 cr, Entirely Fresh Issue

• Rs. 77 cr for acquisition of 49 operational bed at Parekh Hospitals, Ahmedabad, implying cost of Rs.1.6 cr per bed
• Rs. 12 cr payment for 25 operational beds at Ashwini Medical Centre, Anand, purchased in Mar 2025 for Rs. 14.5 cr (implying cost of Rs. 50 lakh per bed)
• Rs. 11 cr to increase stake in 51% subsidiary Harmony Medicare, Bharuch, having 90 operational beds, acquired in Oct 2025, to 100% post IPO
• Rs. 30 cr capex for greenfield 50 bed women’s healthcare hospital in Vadodara, despite company’s core specialty being renal and urology
• Rs. 7 cr capex for equipment purchase and Rs. 1.2 cr debt repayment

Price band: Rs. 108-114 per share

M cap: Rs. 899 cr, implying 28% dilution

• Thankfully, only 10% retail, as company reported loss for FY23

IPO Date: Mon 22^nd Dec to Wed 24^th Dec 2025, Listing Tue 30^th Dec 2025

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

Vadodara-headquartered Hospital Chain

Gujarat Kidney is a 7 year old operator of 7 hospitals in central Gujarat, with total capacity of 490 beds and 340 operational beds. Of this, payment for 25 operational beds of Ashwini acquired in Mar 2025 is yet to be made, while for 90 operational beds of Harmony acquired in Oct 2025, only 51% payment is made. Thus, company’s effective ownership as of date is only 270 operational beds.

Proforma Details is a Misnomer

RHP talks of proforma data, which includes 49 operational beds of Parekh Hospitals, Ahmedabad, proposed to be acquired in future, from the IPO proceeds. How can this be included in proforma as of June 2025? For the uninitiated, proforma for Q1FY26 can include details of acquisition made in Oct 2025, and not of a future date! Utterly misleading on part of company, auditor, merchant banker and disappointing on the part of SEBI to pass such deceptive data in RHP.

Additionally, Page 209 of RHP had ‘incorrect’ data as per company itself, pertaining to term sheet signed with Parekh Hospital: 

“Pursuant to a binding term sheet dated February 28, 2025 executed between our Company and Parekhs Hospital Private Limited (the “Term Sheet”), subject to the successful listing of the Equity Shares of our Company within the period of six (06) months from date of making an application for listing of Equity Shares with the

Stock Exchanges (this is incorrect), or a date mutually agreed between the parties (“Listing Deadline”)”

How can investors then place reliance on company and its disclosures?

Poor Fundamentals

55% occupancy is poor for fixed cost absorption, so is the Average Revenue per Occupied Bed (ARPOB) of just Rs. 11,243. Even for company’s presence in tier 2 towns, this is less than half of Park Medi’s Rs. 27,000, IPO of which saw a weak listing recently.

Gujarat Kidney’s average length of stay of 6 days is 2x industry norm, which points to low profitability. In this backdrop, Rs 9.5 cr PAT reported on FY25 revenue of Rs. 40 cr is not convincing. Moreover, FY25 revenue jumped to Rs. 40 cr, from Rs. 5 cr in FY24, just before the IPO, again a red flag.

Grossly Overpriced

On pre-money basis of Rs. 650 cr (post listing mcap of Rs. 900 cr less fresh issue of Rs. 250 cr), Gujarat Kidney’s ask of Rs. 2.4 cr per bed is extremely high. Recently listed Park Medi is trading below Rs. 2.2 cr per bed, with a PE multiple of 24x. Even taking into account proposed acquisitions of Parekh Hospitals by Gujarat Kidney, on Rs. 20 cr expected annual PAT, PE of 45x is super expensive for a micro-cap regional hospital chain.

Primary Market Observation

Signs of fatigue are already visible in the IPO market, especially for smaller companies trying to make ‘hay when the sun shines’, as seen for KSH International’s under-subscription and recent flat listings such as Park Medi, Nephrocare, Wakefit.