Park Medi World disappoints, lists at 4% discount to IPO price

Park Medi World shares made a muted stock market debut on Wednesday, December 17. The stock listed at ₹155.60 on the BSE, a discount of about 4% to the issue price of ₹162. On the NSE, it opened at ₹158.80, translating into a discount of nearly 2%.

Ahead of the listing, shares of Park Medi World were commanding a grey market premium of ₹4-5 apiece, indicating a potential listing gain of around 3%, which did not fully materialise.

The initial public offering of Park Medi World, which operates the Park Hospital chain across North India, was open for subscription from December 10 to December 12. The company raised ₹920 crore through the IPO.

The issue comprised a fresh issue of ₹770 crore and an offer for sale of ₹150 crore by promoter Dr Ajit Gupta. Ahead of the public issue, the company had raised ₹276 crore through the anchor book on December 9.

Post listing, promoters continue to hold a 95.55% stake in the company, while public shareholders own the remaining 4.55%. This includes investors such as Abakkus Asset Manager, Carnelian, SBI General Insurance, Sattva Developers and Urudavan Investment, which together acquired a 3.6% stake between October and November.

The healthcare chain plans to utilise the IPO proceeds to strengthen its balance sheet, accelerate expansion, and improve profitability over the next three years.

Sanjay Sharma, Group CEO and Whole-Time Director of Park Medi World, said the company will repay around ₹380 crore of debt using the fresh issue proceeds.

With existing debt of about ₹425 crore, the company is expected to become a net cash entity after the listing. This is likely to result in annual interest cost savings of roughly ₹15 crore, directly boosting profitability.

Of the remaining proceeds, ₹88 crore will be allocated towards medical equipment capex, while ₹302 crore will be used for general corporate purposes to support growth initiatives.

Currently, Park Medi World operates 14 hospitals with a total bed capacity of 3,250 across four North Indian states. The company has outlined an aggressive expansion plan to add 1,650 beds by FY28, taking total capacity to 4,900 beds. The expansion will be phased, with 300 beds expected to be added in FY26, 750 beds in FY27, and another 600 beds in FY28.

Sharma said the company's expansion strategy is focused on a cluster-based approach, with an initial emphasis on consolidating its presence in North India. He mentioned the large opportunity in the region, citing that 174 districts require an affordable healthcare model like Park Medi World's, before the company evaluates expansion into East, West, and South India.

To drive growth, Sharma outlined a four-pronged strategy. The company will first focus on increasing occupancy in its newer hospitals, which are currently operating at 50-55% capacity.

In mature hospitals, where occupancy levels are around 75-80%, the emphasis will be on higher-end tertiary and quaternary services such as robotics, cardiac interventions, and joint replacements. The remaining growth drivers will come from greenfield expansions and brownfield acquisitions.