MUMBAI Narayana Hrudayalaya Ltd (NARY.NS), which operates a chain of hospitals, surged more than 38 percent in its stock market debut on Wednesday, as investors bet on growing demand for private healthcare services in Asia's third-largest economy.
The company's shares opened at 291 rupees and rose to as high as 345.65 rupees in a weak broader Mumbai market, against the IPO issue price of 250 rupees a share. Narayana had raised $92 million last month via the IPO.
The strong market debut by the company comes close on the heels of other successful listings in the Indian market in the last couple of months.
The robust recent market listings and a pick-up in corporate profit growth are expected to result in India IPOs raising more than $5 billion in 2016, a six-year high, bankers told Reuters last month.
Volatile markets and slowing economic growth had dampened IPO launches over the last few years in India, and led to sluggish revenue growth and rising debt at companies.
In Bengaluru-based Narayana's case, investors are betting on a surge in demand for private healthcare services in an under-penetrated market bolstering its profit.
India has the lowest number of hospital beds per 10,000 population, while global average stands at 27 beds, which leaves significant scope for bed additions over the next few years, according to a research report by brokerage IIFL.
Narayana, which operates 23 multi-specialty facilities across 31 locations in the country, plans to open more centres to tap the growing demand.
"India requires 3 million beds and we want to be one of the largest players. We want to bring about a paradigm shift, that can only happen by growing," Founder and Chairman Devi Shetty told Reuters.
Narayana will spend about 1 billion rupees ($14.98 million)over the next three years on setting up four hospitals in India partnering with charitable trusts and organisations, Managing Director and CEO Ashutosh Raghuvanshi said.
The expansion would add 1,000 beds to the company's current capacity of about 6,600 beds.
($1 = 66.7550 Indian rupees)
(Editing by Sumeet Chatterjee and Subhranshu Sahu)
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