IKS IPO Over-Subscribed 1.72 Times on Day 2

IKS Health Management on AQuity Acquisition, Margins, and Future Plans

IKS Health is optimistic about substantial growth opportunities in the US healthcare sector, leveraging technology and AI to enhance efficiency. The company aims to expand its presence in the US market, explore potential entry into Australia and Canada, and eventually bring its expertise to India.

Growth in the US Healthcare Market

Sachin Gupta, Whole-time Director, explained that the US healthcare provider segment is a $1.5 trillion market growing at 7% annually. Within this, $225 billion is spent on tasks that IKS Health can address, but only $30 billion has been outsourced so far. This segment is expanding at a 12% annual rate, and with the AQuity acquisition, IKS Health is confident in achieving growth beyond this rate over the next 10-20 years. Historically, IKS Health grew at 27% annually from FY20 to FY24 on a standalone basis.

Technology and AI Integration

Gupta emphasized that the company combines proprietary technology with a robust human workforce in India. Generative AI (Gen-AI) is a key enabler, significantly improving scalability and efficiency. For instance, advancements in clinical documentation now allow one doctor in India to support ten in the US, compared to a 1:1 ratio previously. As a result, R&D spending is set to increase from 5.5% to 7.5% of revenue. Customers value outcomes over the mix of technology and human labor, enabling IKS to improve margins through technological innovation.

Competitive Landscape and Differentiation

The healthcare outsourcing market has seen increasing competition, with many companies offering specialized solutions. However, IKS Health differentiates itself by providing a comprehensive platform that addresses all 16 tasks physician groups typically outsource. This holistic approach appeals to providers seeking to streamline operations and vendor management.

Addressing Declining Margins

Chief Financial Officer Nithya Balasubramanian attributed declining margins to the AQuity acquisition, which initially had a 12% margin profile compared to IKS Health’s standalone margins of 39%. Through deploying IKS’s technology and offshoring AQuity’s workforce, margins improved from 24% post-acquisition to 28% by the first half of FY25. The company aims to continue margin expansion through further integration and operational improvements.

Debt Reduction Strategy

IKS Health took on $120 million in debt for the AQuity acquisition but has already reduced it to $66 million by the first half of FY25. Strong cash flows, with EBITDA-to-operating cash flow conversion rates above 95%, are expected to make the debt insignificant by FY26.

Geographic Expansion and Indian Market Prospects

While IKS Health remains focused on the US market, it is exploring opportunities in Australia and Canada. For India, Gupta noted that factors like the maturation of health insurance, consolidation of physician practices, and rising prevalence of chronic diseases could make their model applicable in 5-7 years. The company aims to leverage its US experience to serve the Indian market at the right time.

In summary, IKS Health is poised for growth, leveraging technology, strategic acquisitions, and operational efficiencies while carefully planning geographic expansion to ensure sustainable long-term success.

Inventurus Knowledge Solutions IPO Day 1: Fully Subscribed Amid High Retail Demand

IKS IPO Over-Subscribed 1.72 Times on Day 2 Inventurus Knowledge Solutions Ltd (IKS), a healthcare solutions and care enablement provider, saw its initial public offering (IPO) fully subscribed on the first day of bidding, thanks to strong retail investor interest.

Key Details of the IPO:

• Offer Structure: The IPO is entirely an offer-for-sale (OFS) of 1.88 crore shares.
• Price Band: ₹1,265–₹1,329 per share.
• Total Proceeds: ₹2,497.92 crore.
• Listing: Shares are set to debut on BSE and NSE on December 19, 2024.

Subscription Status:

The IPO received bids for over 1.4 crore shares against 1.03 crore shares on offer, resulting in a subscription rate of 1.36 times by the end of Day 1.

• Retail Investors: Subscribed 1.67 times with 31.35 lakh bids for 18.73 lakh shares.
• Non-Institutional Investors (NIIs): Subscribed 79%, with bids for 22.09 lakh shares.
• Qualified Institutional Buyers (QIBs): Subscribed 1.54 times with 86.77 lakh bids.
• Employees: Subscribed 80%, with 52,085 bids for 65,000 reserved shares.

Anchor Investors and Pre-IPO Funds Raised:

Ahead of the public launch, IKS raised ₹1,120 crore through anchor investors, allotting 84.29 lakh shares at ₹1,329 per share (upper price band). Notable investors include Fidelity Funds, Abu Dhabi Investment Authority, Government Pension Fund Global, HDFC Mutual Fund, and Mirae Asset, among others.

Key Dates:

• Subscription Period: December 12–16, 2024.
• Share Allotment Finalization: December 17, 2024.
• Listing Date: December 19, 2024.

About Inventurus Knowledge Solutions:

IKS is a prominent healthcare solutions provider catering to outpatient and inpatient care organizations across the US, Canada, and Australia, with a primary focus on the US. The company supports over 800 healthcare entities, including multi-specialty groups, academic centers, and single-specialty practices.

Recent Acquisitions and Future Goals:

In 2023, IKS acquired Aquity Holdings, enhancing its expertise in clinical documentation, medical coding, and revenue integrity. The IPO aims to improve the company’s market visibility, boost brand recognition, and provide liquidity for shareholders.

Retail investors and institutions alike have shown confidence in the IPO, reflecting IKS’s growth potential in the global healthcare solutions market.

Inventurus Knowledge Solutions IPO Day 2: Strong Grey Market Premium and Positive Reviews

IKS IPO Over-Subscribed 1.72 Times on Day 2 Inventurus Knowledge Solutions Ltd’s initial public offering (IPO) has garnered significant attention, with its grey market premium (GMP) climbing to ₹425, reflecting robust investor interest. Backed by Rekha Jhunjhunwala, the IPO is open for subscription until December 16, 2024.

Key IPO Details: IKS IPO Over-Subscribed 1.72 Times on Day 2

1. Grey Market Premium: The GMP has surged from ₹376 to ₹425, signaling strong demand among investors.
2. Price Band: The company has set the price range at ₹1,265 to ₹1,329 per share.
3. Lot Size: Investors can bid in lots of 11 shares, requiring a minimum investment of ₹13,915 to ₹14,619.
4. Issue Size: The IPO is entirely an offer-for-sale (OFS) of ₹2,497.92 crore.
5. Subscription Period: December 12–16, 2024.
6. Listing Date: Shares are expected to debut on the BSE and NSE on December 19, 2024.

Subscription Status (Day 2): IKS IPO Over-Subscribed 1.72 Times on Day 2

By 11:54 AM on the second day of bidding:

• Overall Subscription: 1.72 times.
• Retail Investors: 2.66 times.
• Non-Institutional Investors (NIIs): 1.47 times.
• Qualified Institutional Buyers (QIBs): 1.55 times.

Promoters and Stakeholders: IKS IPO Over-Subscribed 1.72 Times on Day 2

Promoters include Rekha Jhunjhunwala, Sachin Gupta, and various Jhunjhunwala family trusts. Rekha Jhunjhunwala holds 390,478 shares, representing 0.23% of the company’s equity (per the RHP).

Financial Performance and Valuation:

• FY24 Revenue Growth: 75% YoY, with Profit After Tax (PAT) up 21.4%.
• EBITDA Margin: 28.6% for FY24 and 28% for H1FY25.
• Attrition Rate: Improved from 24.68% in H1FY24 to 14.45% in H1FY25.
• Valuation: The company’s P/E ratio is 60x on the upper price band, reflecting its strong financial growth trajectory.

Analyst Recommendations:

• Sagar Shetty, StoxBox: Recommended a “SUBSCRIBE” rating, citing the company’s robust financial growth, market position, and ability to capitalize on emerging trends.
• Rajan Shinde, Mehta Equities: Highlighted the company’s premium valuation due to its unique market position and long-term potential, despite concerns over the 100% OFS structure. Assigned a “SUBSCRIBE” rating for long-term investors.

Why Invest?

IKS IPO Over-Subscribed 1.72 Times on Day 2 Inventurus Knowledge Solutions benefits from over 15 years of experience and strong client relationships, positioning it well in the growing healthcare solutions market. With no direct competitors in the listed space and promising financials, the IPO has been deemed attractive for medium- to long-term investors.