Medi Assist Healthcare Services Ltd IPO

Last Updated on January 12, 2024 by BFSLTeam BFSLTeam

Medi Assist Healthcare Services Ltd is a leading insurtech and healthtech company and the largest third-party administrator (TPA) in India. The Bengaluru-based company serves as an intermediary between insurance companies, healthcare providers and insured people.

This is the company’s second attempt at going public. Previously, the company had filed a DRHP in May 2021 but due to the rough market condition induced by the COVID-19 pandemic, it was deferred. In August 2023, the company refiled its DRHP with SEBI to launch an IPO, an Offer for Sale (OFS) of 2,80,28,168 shares.

It will be a pure OFS by promoters and shareholders and the proceeds will go to them. The company will not receive any funds from it. If you are interested, read this blog to learn more about Medi Assist Healthcare Services IPO.

Also Read: Benefits of Investing in IPO

About Medi Assist Healthcare Services IPO

Being India’s largest Third-Party Administrator (TPA), Medi Assist Healthcare Services Limited collaborates with insurers to provide policyholders the advantage of cashless access to a wide network of healthcare providers.  Its key service is to administer health benefits for public health schemes, retail members, and employers. The aim is to lower healthcare costs by driving innovation. 

Primarily, they partner with employers to administer their employee health insurance plans. Medi Assist has a network of over 14,000 hospitals across 32 states and union territories in 967 towns and cities. 

Medi Assist Healthcare Services Ltd – Company Financials 

The table below lays out crucial financial details of the last three financial years. Go through it to understand how the company has been performing. 

Parameters as Per the Year Ending on	31 March 2023	31 March 2022	31 March 2021
Total Assets	7,057.16	6,022.30	5,452.95
Total Liabilities	3,220.44	2,629.44	2,527.50
Total Expenses	4,153.46	3,339.47	2,845.32
Total Revenue	5,189.55	4,120.23	3,455.74
Profit After Tax	753.08	634.67	380.05
EBITDA	1,333.67	1,120.45	984.27
Earnings Per Share (EPS) * (Basic)	10.76	9.33	3.92
Earnings Per Share (EPS) (Diluted)	10.65	9.25	3.88

Strengths 

Here are some of the many driving factors behind the company’s growth: 

• It is the largest health benefits administrator in India in terms of revenue and premium services for retail and group plans for financial years 2020, 2021 and 2022.
• The company’s ability to simultaneously deliver substantial value to all stakeholders in the health insurance ecosystem is firmly rooted in its purpose-built, modern, scalable technology platforms and applications.
• On its portal, insurance companies have, among other things, immediate access to processed claims, document review and inquiry tracking. They can analyse trends, evaluate historical performance and make optimised decisions about the health benefits portfolio. 
• As of March 31, 2023, 27 insurance companies joined the platform, which enabled smooth settlement of claims. In FY 2023, 73.19% of all hospitalisations processed through the portal integrations were successfully cleared.
• With deep knowledge of the Indian health insurance landscape, the company has built trust and lasting partnerships. Insurers benefit from the diverse services and efficient product management offered by Medi Assist Healthcare Services. 
• The company provides seamless technology-driven integration for data transfer, faster transactions for a better user experience, and accurate claim processing for members in line with policy terms.

Risks Involved 

Along with the strengths and advantages, there are also some risks of investing in the company that need to be kept in check. Here are a few: 

• The company relies heavily on a few clients for a significant part of its income. In FY 2021, 2022 and 2023, the top five clients accounted for 78.23%, 78.95% and 77.97% of total customer contract revenues. This amounted to Rs. 2,524.84 crore, Rs. 3,109.32 crore and Rs. 3937.02 crore, respectively. The loss of these significant clients or curtailment of business with them could adversely affect Medi Assist’s business.
• The business depends on effective network management, negotiation and relationships, but future expansion is uncertain. If the company can’t generate significant business, this can impact pricing deals. 2,865 hospitals were eliminated in FY 2023 from its network, which could hurt the business, finances and overall health in the future.
• This business is heavily dependent on specific industry group accounts, making it vulnerable to adverse industry developments. Additionally, changes in relationships with insurers or corporations could harm the company’s business and finances.

Also Read: How Can You Analyse An IPO?

Conclusion

Medi Assist Healthcare has stated that the intention of launching this IPO is to purely enjoy the benefit of listing equity shares on the stock exchange. Also, the proceeds from the OFS will go to the selling stakeholders. The company will await SEBI’s nod for its IPO and announce the tentative timeline later. You can check the latest updates here.

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