Gian Life Care Limited

Started in 2018, Kanpur (UP) based Gian Life Care Limited is engaged in the business of providing diagnostic and related healthcare services. The company provides a wide range of diagnostic tests and services like patient diagnosis services, prevention, and wellness diagnosis services to patients and healthcare providers. The company caters to individual patients, hospitals, corporates and other healthcare providers. The company offers over 1,344 tests including biochemistry, clinical pathology, coagulation, cytogenetics, cytology, hematology, histopathology, immunoassay, microbiology, molecular biology, and radiology services. Gian Life is NABL accredited and ISO 9001:2015 certified company. It has 59 full-time employees. On the financial performance front, Gian Life has posted turnover/ net profits of Rs. 0.56 cr. / Rs. 0.07 cr. (March FY19) and Rs. 1.82 cr. / Rs. 0.34 cr. (Q1 FY20). As a proprietorship concern, the group posted turnover/ pre-tax profits of Rs. 8.54 cr. / Rs. 0.53 cr. (FY16) and Rs. 8.15 cr. / Rs. 1.12 cr. (FY17). It has posted a turnover of Rs. 8.15 cr. with a net profit of Rs. 0.99 cr. for FY18 and for the 11 months ended on 28.02.19 it has earned a net profit of Rs. 0.89 cr. on a turnover of Rs. 7.42 cr. The issue is priced at a P/BV of 1.99 based on its NAV of Rs. 11.07 as on 30.06.19 and at a P/BV of 1.65 based on post IPO NAV of Rs 13.37. Company's current debt / equity ratio of 0.79 will come down to 0.43 post issue. If we annualise latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 7.61 and if we consider FY 19 earnings, than its priced at P/E of 21.36. So based on Q1 FY 20 earnings it looks reasonably priced, but if company can sustain the same or not, is major concern. As per RHP, GLCL has shown Dr Lal Path, Thyrocare and Dr Lalchandani as its listed peers. The comparison is shown in above table. However, Dr Lal Path and Thyrocare are strictly not comparable, but close peer Dr Lalchandani is not faring well since listing. On BRLM's front for Hem Securities Limited, this is the 25th IPO in the last three fiscals (including the ongoing). Out of last ten listing, four opened at discount or par and the rest with premiums ranging from 0.03% to 20% on the day of listings. As of now from last 10 IPOs, 5 are trading below issue price and remaining above or near issue price. ( As on 30.12.2019 ) Very limited financial data is available and if we consider old firm financial than its almost static. As per Q1 FY20 earnings issue looks reasonably priced, but this will sustain or not, is major concern. The industry is expected to grow at good rate, but its highly competitive segment. The performance of BRLM is average, So we give AVOID rating to this SME IPO.

• 1 Mr. Arun Kumar Gupta