Medi Assist Healthcare Services Limited IPO – Get Date, Price, Review and Details

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In this article, we will discuss:

• Introduction
• The objective of the fresh issue
• Risks
• Strengths
• Financial Snapshot
• Conclusion

Introduction

Incorporated in June 2002, Medi Assist Healthcare Services Limited is a health-tech and insurance-tech company that manages health benefits for employers, retail members, and public health schemes, primarily serving insurance companies. It provides third-party administration services to insurance companies through its wholly-owned subsidiaries, Medi Assist TPA, Medvantage TPA, and Raksha TPA. Medi Assist offers medical insurance and cashless hospitalization through a network of healthcare service providers. However, the company also acts as a mediator between (a) general and health insurance companies and their insured members, (b) insurance companies and healthcare providers (such as hospitals), and (c) the Government and beneficiaries of public health schemes. It also facilitates other healthcare and ancillary services such as hospitalization services, call centre services, customer relations and contract management services, billing services, and claim processing services. Over the years, the company has developed a pan-India healthcare provider network, which comprises 18,754 hospitals across 1,069 cities and towns and 31 states (including union territories) in India, as of September 30, 2023. Its growth has typically been driven by multiple factors, including organic growth from existing clients and new account additions. It has pursued inorganic growth strategies to consolidate its market share in India and serve the overseas requirements of its clients. It has collaborated with 36 insurance companies in India and worldwide as of March 31, 2023.

The Objective of the Fresh Issue

The company will not receive any of the offer proceeds as the entire issue is an offer for sale and hence it will be received by the respective selling shareholders.

Risks

• Customer Concentration: The top 5 clients contributed 71% of the revenues as of 30 ^th Sep 2023. The loss of a single client could adversely affect its business and prospects.
• The group's income from benefit administration services to insurance companies and retail portfolios depends on a percentage of managed premiums. A decrease in managed premiums could impact future revenue and profitability.
• A decrease in insurance companies outsourcing claims processing and other related activities to TPAs could impact the business.
• Changing laws, rules and regulations, and legal uncertainties may adversely affect the business.
• The third-party administration industry is intensely competitive and the inability to compete effectively may adversely affect our business, results of operations, and financial condition.

Strengths

• Well-established 3 ^rd party administrator in India. According to the F&S report the overall market share in the gross premium serviced for the FY2023 stood at 26.39%.
• Scalable technology-enabled infrastructure addressing the needs of all stakeholders of the entire health insurance ecosystem.
• Cost Leadership: Technology has enabled to increase in the volume of transactions without having to correspondingly increase workforce, thus optimizing operating expenses and driving profitability in the past few years.
• Diversified base of group accounts with longstanding relationships. Catering to over 78% of the Nifty 50 companies and 35% of the BSE 500 companies, as of September 30, 2023.

Financial Snapshot

Conclusion

The Health Insurance segment is itself an emerging market in India. With continued efforts from government and private players, the pace of insurance penetration is increasing.

Being a technology platform, this company derives the benefits of the network effect due to onboarding a large number of insurers as well as hospital chains establishing a moat for the organization.

The company’s Revenues and PAT are consistently on an upward trajectory with impressive margins and capital efficiency indicators. Although the company doesn’t have any listed competitors for its comparison in unlisted space MDIndia Health Insurance TPA Pvt ltd, Vidal Health Insurance TPA Pvt ltd, and Family Health Insurance TPA Pvt ltd are few of its peers however these companies' scale of operations, profits, margins are much lower than Medi Assist.

The company is bringing its IPO at an earnings valuation of 38.8 times considering the business growth in the previous periods this valuation seems to be fairly priced. Based on the Industry growth, business operations, and valuations the investors should subscribe to this IPO.

So, we suggest our investors to Subscibe the IPO.