ET Intelligence Group: Manipal Health Enterprises, a healthcare service provider, plans to raise ₹8,000 crore through a fresh issue for repayment of debt, acquisition of stake in the subsidiary and general corporate purposes. It will also raise ₹1,275 crore through an offer for sale.

The promoter group's stake will fall to 72.1% after the IPO from 81.4%. Around 46% of the revenue comes from Karnataka, signalling geographic concentration. Its occupancy rate declined to 64.5% in FY26 from 67.1% a year ago.

The company's revenue growth was strong in the past two years, but it faced margin pressure. The issue also appears to be aggressively priced. Given these factors, investors may wait to see clarity post listing.

Lower occupancy, margin pressure a concern

Incorporated in 2010, Manipal Health Enterprises, a part of the Manipal Group, offers a wide range of healthcare services including tertiary and quaternary care, organ transplants, oncology, cardiology, neurology, orthopaedics, and preventive healthcare.

As of March 31, 2026, the company operated 49 hospitals with 13,037 licensed beds and 21 clinics. The company has occupancy of 64.5%, compared with 67-76% for its peers. Its average length of stay is also lower at 2.8 days compared with peers which is between 3.2 and 4.2 days.

Over 64% of its revenue is derived from cardiac sciences, oncology, neurosciences, gastro sciences, orthopaedics, and renal sciences (CONGO-R) specialties.

According to Crisil report, Manipal Health Enterprises is the largest pan-India multispecialty hospital network by bed capacity and also the second largest hospital chain by number of hospitals as of March 31, 2026 after Apollo Hospitals.

Revenue from operations grew 29.4% annually to ₹10,335.8 crore and net profit rose 31.1% to ₹916.5 crore between FY24 and FY26. Operating profit before interest, tax, depreciation and amortisation (Ebitda) increased 24.8% to ₹2,644.1 crore during the period. On a year-on-year basis, revenue grew 25.4%, Ebitda rose 22.1% while net profit declined 15.3% in FY26. Ebitda margin dropped to 25.6% in FY26 from 27.5% in FY24. Cash flow from operations grew 32.4% to ₹2,078.4 crore in FY26 over FY25. Average revenue per occupied bed grew 5.7% annually to ₹68,937.61 over FY24-26.

Considering the post-IPO equity and net profit for FY26, the company demands a price-earnings (P/E) multiple of 85, quite higher than its peers, which is between 62-68 for Apollo Hospitals Enterprise, Max Healthcare Institute and Fortis Healthcare.