Why:
- The whole company is one hospital that stands on land the government now owns. A tribunal ruled the main plot belongs to the Central Government, which is recorded as the owner in the 2025 land record; the company calls its own occupancy "informal" and says eviction is possible (T1). That plot holds about three-quarters of the hospital, which is 99.85% of revenue. The title cannot be cleaned up by the company, and outside checking confirmed the defect is real, though not an imminent eviction (T3).
- The hospital is treating fewer patients, not more. Bed occupancy has fallen every year for four years, from 70% to 47%, while beds were added; in the last year patient-days fell 4.4% and surgeries fell 12.8% (T1). Revenue still rose 6.6%, but entirely because the price per bed-day rose 9.6% as the patient mix shifted to government schemes. Those schemes now pay after 239 days, so ₹5.6 crore of accounting profit turned into ₹2.1 crore of cash, not enough to cover the year's interest.
- The IPO money does not fund the growth the company is selling. The prospectus describes cancer care, cardiac surgery and robotics, but the offer funds debt repayment, working capital and unnamed acquisitions with no money for any of it (T1).
Valuation at the band
| Floor ₹96 (T1) | Cap ₹102 (T1) | |
|---|---|---|
| Bid window | 24 to 27 August 2026 | |
| Lot size | 1,200 shares | |
| Post-issue shares | 11,429,600 | 11,429,600 |
| Market value | ₹110 cr | ₹117 cr |
| Price to earnings | 19.5x | 20.7x |
| Enterprise value to operating profit | 10.8x | 11.2x |
| Same, after the ₹17 cr of debt the issue repays | 9.6x | 10.1x |
| Promoter holding after | 70.0% | 70.0% |
The company's own peer table runs from 24.5x to 27.6x earnings (average 26.1x), so the band sits below its listed peers (T1). The price does not change the verdict either way: the six ratings below judge the business and the offer's shape, not what it costs.
The story
A single 150-bed hospital in Ferozepur, Punjab, whose only growing line is general medical and critical-care admissions billed through government health schemes. Everything the company markets as specialist care (cardiology, neurosurgery, gastroenterology) shrank last year. The profit lever is filling the beds it already has, and occupancy has fallen for four straight years instead.
What this business is
Anil Baghi Hospital, running since 1985, is a 150-bed (125 in use) multi-specialty hospital in Ferozepur, a border district in Punjab. It has 70 intensive-care beds, is NABH accredited, and is empanelled with government schemes (Ayushman Bharat, ECHS, Railways) and 30-plus insurers. The pharmacy, lab and dialysis are run by outside partners; the company books only a profit share on them.
The money is made on occupied bed-days: about 6,400 admissions a year, average stay 3.4 days, roughly ₹67,000 per admission. Because doctors are paid a share of their billing and the support services are outsourced, the fixed cost base is small, so filling empty beds would lift profit a lot. That is the whole investment case, and it is exactly what has not been happening.
The customer base is shifting toward government schemes, which now set the price and are 56% of revenue. Those schemes pay slowly. Self-pay patients, whom the company itself calls the measure of its reputation, fell 17.5% last year.
Easy or difficult business? Running a mid-size hospital in a Tier-3 town is moderately hard: the intensive-care beds, ventilators and NABH accreditation are a real barrier to a new entrant, but the core service (general medical admissions) is the least specialised thing a hospital sells, and there is no patent, brand lock-in or switching cost. The differentiation depends on named specialist doctors, and the hospital has struggled to keep them: an interventional cardiologist hired in late 2024 left within six months over unpaid salary and is suing, and cardiology revenue then halved.
Key numbers
| ₹ cr | FY2024 | FY2025 | FY2026 |
|---|---|---|---|
| Revenue | 41.4 | 49.3 | 52.5 |
| Revenue growth % | n/a | 19.1 | 6.6 |
| Gross margin % | 46.6 | 53.4 | 54.9 |
| EBITDA | 6.9 | 13.2 | 14.7 |
| EBITDA margin % | 16.7 | 26.8 | 28.0 |
| PAT | 1.7 | 5.3 | 5.6 |
| PAT growth % | n/a | 220.9 | 5.5 |
The margin jump happened in FY2025, mostly from lower medical-consumable costs, and has held. But FY2026 growth was all price and no volume: bed-days fell 4.4% and the standalone hospital grew only 4.4% (the 6.6% headline includes newly consolidated partner LLPs). Across three years the company earned ₹12.6 crore of profit, built ₹27 crore of receivables, spent ₹27 crore on equipment, and borrowed ₹33 crore to bridge the gap. It has never generated positive free cash flow and has never paid a dividend.
Scorecard
| Block | Rating | Why |
|---|---|---|
| Right to win | MARGINAL | The genuine assets are a licence to participate, not a moat: a 40-year local name, NABH accreditation, and government-scheme empanelment that is converting into growing institutional volume, real things a new hospital cannot assemble quickly. But that channel sets its own prices and pays in 239 days; the hospital cannot keep its specialist doctors; and every measure other than administered-price government work went backwards last year. Thin and non-defensible, in a small catchment where serious cases already leave for Bathinda, Faridkot and Ludhiana. |
| Industry and TAM | MARGINAL | India is genuinely short of hospital beds, and this hospital's own beds are 53% empty, so the room to grow exists on paper. But the filing gives no local data at all, and occupancy has fallen four years running, so the real constraint is capturing demand in one district, not the size of the national market. |
| Financial momentum | MARGINAL | A real 28% margin (best in its peer table) earned at 47% occupancy, but volumes flat, occupancy falling, receivables at 239 days, and operating cash below interest. |
| Risks, governance, RPTs | MARGINAL | The single hospital sits on Central-Government-owned land under informal occupancy, an uncurable title on the only asset, alongside a record of late statutory filings and two reporting-integrity lapses (unsigned FY2023 accounts, related-party items omitted). Not an imminent loss, but a permanent overhang. |
| Promoter and cap table | MARGINAL | Real promoter money in (loan converted to equity, personal guarantees, no shares sold) and a genuine margin improvement, against a worsening record of adding beds into falling occupancy and keeping the land and several related businesses outside the listed company. |
| Offer structure | PASS | A clean shape: 100% fresh issue, no selling shareholders, promoters diluting to 70% and locked in. The money goes into the company, even if it funds deleveraging rather than the growth story. |
Watch out for
- The land title is the single biggest risk. About three-quarters of the hospital sits on a plot the Central Government now owns, under occupancy the company itself calls informal, originally granted to a promoter personally in 1984 (T1). The title cannot be mortgaged or cleaned up by the company.
- The lead specialist left over unpaid salary and is suing. The interventional cardiologist hired in December 2024 resigned within six months alleging unpaid salary and inferior equipment; cardiology revenue then fell 45% (T1).
- Receivables are stretching dangerously. ₹6.2 crore of the receivable book is more than a year old with no provision taken, which is larger than a full year's profit (T1).
- The growth plan is unfunded. Oncology, cardiac surgery and robotics are described as strategy but no rupee of the offer pays for them (T1).
The offer
- Raising about ₹11 crore, entirely new shares issued by the company; no existing holder sells anything (T1).
- For repaying ₹17 crore of bank debt, ₹5 crore of working capital, and unnamed acquisitions and general purposes. (The debt repayment exceeds the total raise because it is drawn partly from working capital that the offer also funds.)
- Implied valuation is in the table at the top.
- Promoters hold 100% before the offer and about 70% after; ₹3.6 crore of promoter loans remain in the company.
Assessment from the RHP, with no outside verification beyond the price band and offer dates, which come from the NSE public records, and the outside checking noted on this page. Numbers carry source tiers: (T1) the filing's audited sections, (T3) mainstream and secondary sources, UNVERIFIED where nothing supports them. Not a recommendation. The valuation section states what the announced band implies and is not a view on whether that price is right.