Paras Healthcare IPO subscribed 19% so far on Day 2; retail investors lead demand

In the grey market, the Paras Healthcare IPO was commanding a grey market premium (GMP) of Rs 25 per share on the morning of October 22, as per Investorgain. Based on the upper end of the IPO price band of Rs 693, the premium indicated a potential listing gain of around 3.6 percent, taking the implied listing price to approximately Rs 718 per share. Read Also: Fusion CX shares list at 5.5% premium on NSE — should you buy, sell or hold?

The grey market premium is an unofficial indicator of investor sentiment and is based on transactions outside the regulated stock exchanges. It is not a guarantee of listing performance, and the premium can fluctuate before the shares make their stock market debut. The Paras Healthcare IPO will remain open for public subscription from October 21 to October 23. The company has fixed the price band at Rs 660–693 per share.

The public issue comprises a fresh issue of shares worth Rs 500 crore and an offer for sale (OFS) of Rs 950 crore, taking the total issue size to Rs 1,450 crore. Under the OFS, promoter Dharminder Kumar Nagar will sell shares worth Rs 300 crore, while Commelina, an affiliate of private equity firm Creador, will offload shares worth Rs 650 crore. Ahead of the IPO, Paras Healthcare raised Rs 652.5 crore through its anchor book.

The company allotted 94.15 lakh equity shares to 21 institutional investors on Monday. Global investors participating in the anchor book included the Abu Dhabi Investment Authority, BlackRock Global Funds, Eastspring Investments, Government Pension Fund Global, Natixis International Funds, Integrated Core Strategies (Asia) and Citigroup Global. Paras Healthcare plans to utilise Rs 375 crore from the net proceeds of the fresh issue to repay a portion of its outstanding debt.

The remaining proceeds will be used for general corporate purposes. The IPO proceeds from the fresh issue will go to the company, while the OFS component will be received by the selling shareholders. Paras Healthcare provides tertiary and quaternary healthcare services through a network of eight hospitals operating under the Paras brand. The hospitals have a combined capacity of 2,211 beds across North India, Bihar and Jharkhand.

As part of its expansion strategy, the company plans to add a 300-bed hospital in Gurugram and a 500-bed facility in Ludhiana. The two hospitals are expected to become operational in the current and next financial years, respectively. The expansion is aimed at increasing the company's hospital capacity and strengthening its presence in key healthcare markets. JM Financial, BofA Securities India and Nuvama Wealth Management are the merchant bankers to the Paras Healthcare IPO.