GPT Healthcare Ltd IPO

Key regional corporate healthcare company with a strong foothold in under-penetrated and densely populated healthcare delivery markets

ight-sized`, full service and strategically located hospitals leading to high return on capital

Well diversified specialty mix and location mix

Ability to attract, train and retain quality medical professionals

Track record of operating and financial performance and growth

Professional management and experienced leadership

Investment in infrastructure, processes and clinical excellence driving affordability, and a strong value proposition for stakeholders

The hospital derives approximately 70% of its revenue from operations from its hospitals situated in West Bengal as these serve a significant percentage of its patients. Further, all the hospitals are located in the eastern region of India. Any impact on the revenue from these hospitals or any change in the economic or political conditions of West Bengal could materially affect its business, financial condition, results of operations and cash flows.

The name of Ishwari Prasad Tantia, one of the members of its Promoter Group was published in the list of Wilful Defaulters by certain financial institutions. Additionally, NSDL has frozen his demat account due to non-compliance with certain provisions of the Listing Regulations by Tantia Constructions Limited ("Tantia Constructions"), wherein he is a promoter. Any adverse order, direction, notice or penalty by any bank or the RBI, SEBI or any other regulatory authority in the future against any member of the Promoter Group or any entity with which any of its member of the Promoter Group is associated, could have an adverse effect on its reputation, consequently, affecting its business operations.

The hospital face competition from other healthcare service providers. If its unable to compete effectively, its business, results of operations and cash flows may be materially and adversely affected.

The Bed Occupancy Rate of the Company is lower than some of its listed peers. If its unable to maintain bed occupancy rates at sufficient levels, the hospital may not be able to generate adequate returns on its capital expenditure, which could materially and adversely affect its operating efficiencies and the hospital`s profitability.

The hospital is dependent on its healthcare professionals, including its doctors that the hospital engage on a consultancy basis. Loss of or its inability to attract or retain such persons could adversely affect its business, financial condition, results of operations and cash flows.

The hospital is dependent on availability of nurses to provide quality healthcare services. A decline in the number of trained and available nurses may lead to a decline in its ability to provide required patient care and consequently adversely affect its operations and performance.

If the hospital does not receive payments on time from its patients, its financial condition, cash flows and results of operations may be materially and adversely affected.

The hospital, its Promoters and Directors are involved in certain legal proceedings, any adverse developments related to which could affect its operations. The hospital could suffer significant litigation expenses in defending these claims and could be subject to significant damage, compensation, or other remedies, which could adversely affect its reputation, business, results from operations, financial conditions and cash flows.

Its business is highly dependent on the strength of the hospital brand and reputation. Failure to maintain and enhance its brand and reputation, and any negative publicity and allegations in the media against it, may materially and adversely affect the level of market recognition, and trust in, its services, which could result in a material adverse impact on its business, financial condition, results of operations and prospects.

Its Promoter, Chairman and Whole-time Director, Dwarika Prasad Tantia, its Promoter Shree Gopal Tantia, and its Independent Director, Hari Modi are unable to trace their bachelor`s degrees and the hospital has relied on affidavits furnished by them for such details of their profile.

The hospital is significantly dependent on certain specialties. Any impact on its revenue from such specialties could have a material adverse effect on its business, financial condition, results of operations and cash flows.

The hospital may experience delays in construction or commencement of operations of its proposed hospitals or the hospital may not be successful in expanding its operations to other parts of India, in a timely manner or at all, which could have an adverse effect on its business, financial condition, results of operations and cash flows.

If the hospital is unable to keep pace with technological changes, new equipment and service introductions, changes in patients` needs and evolving industry standards as well as failure or malfunction of its medical or other equipment, its business and financial condition may be adversely affected.

Its industry is highly regulated and requires it to obtain, renew and maintain statutory and regulatory permits, accreditations, licenses and comply with applicable safety, health, environmental, labour and other governmental regulations. Any regulatory changes or violations of such rules and regulations may adversely affect its business, financial condition and results of operations.

The Company has been involved in an instance of regulatory non-compliance in the past. Any such non-compliance in the future may have an impact on its business, financials and results of operations.

The hospital is dependent on a number of Key Personnel, including its Promoters, Senior Management. Loss of or its inability to attract or retain such persons could adversely affect its business, financial condition, results of operations and cash flows.

The hospital outsource some of its service functions to third-party contractors. Any lapse by such third-party service providers may have adverse consequences on its business and reputation.

Its Promoters, GPT Sons Private Limited, Dwarika Prasad Tantia and Om Tantia, have provided corporate/personal guarantees in relation to certain loan facilities availed by it, which if revoked may require alternative guarantees, repayment of amounts due or termination of the facilities and may adversely impact its cash flow, business and result of operations.

The hospital may fail to protect its intellectual property rights and may be exposed to misappropriation and infringement claims by third parties, either of which may have a material adverse effect on its business and reputation.

Its indebtedness and the conditions and restrictions imposed by its financing arrangements may limit its ability to grow its business and adversely impact the hospital`s business.

Its funding requirements and proposed deployment of the Net Proceeds are based on management estimates and have not been independently appraised by any bank or financial institution or any other independent agency and may be subject to change based on various factors, some of which are beyond its control. Any variation in the utilization of the Net Proceeds or in the terms of the conditions as disclosed in this Red Herring Prospectus would be subject to certain compliance requirements, including prior shareholders` approval, and its business, financial condition and results of operations may be adversely affected.

Certain lands on which two of its hospital buildings are operating are not owned by it but are leased on a long term basis. Further, its Registered Office is located on land owned by GPT Estate Private Limited and held by it on a short-term lease basis. Any adverse impact on the title or ownership rights of the owner or breach of the terms or non-renewal of the lease agreement on commercially favourable terms or at all may lead to disruptions and may materially and adversely impact its business, financial condition, results of operations and cashflows.

Its insurance coverage may not adequately cover all damages arising out of the claims against its hospitals. This may have an adverse effect on the hospital`s financial condition, results of operations, reputation, cash flows and prospects.

Lack of health insurance in India may adversely affect its business, cash flows, financial condition and results of operations.

The hospital`s has in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders.

Its Statutory Auditor has included emphasis of matter paragraphs in their reports on its Restated Financial Information and its Restated Consolidated Financial Information.

The hospital has certain commitments and contingent liabilities that may adversely affect its financial condition.

Its ability to pay dividends in the future will depend on its earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.

The hospital may requires additional funding to finance its operations, which may not be available on terms acceptable to it, or at all, and if the hospital is unable to raise funds, the value of your investment in it may be negatively impacted.

The hospital relies on third party suppliers and manufacturers for its supplies and equipment. Failure of such third parties to meet their obligations could adversely affect its business, results of operations and cash flows.

If the hospital fail to achieve favourable pricing on medical consumables, pharmacy items, drugs, and surgical instruments from its suppliers or are unable to pass on any cost increases to its payers, its profitability could be materially and adversely affected.

If the hospital is unable to establish and maintain an effective internal control, its business and reputation could be adversely affected.

The hospital and its Promoters are exposed to legal claims and regulatory actions arising from the provision of healthcare services and may be subject to liabilities arising from claims of unfair trade practices and medical negligence which could materially and adversely affect its reputation and prospects.

The hospital is required to handle personal information, including medical data, as a result of which its could face breach or theft of confidential and other sensitive information of its patients or procedures or any kind of data leakage in the past, any breach of its confidentiality obligations to the hospital patients, including due to data leakages or improper use of such medical information. This could expose it to fines, potential liabilities and legal proceedings, such as litigation or regulatory proceedings, which would adversely impact its reputation.

Its Promoters and certain members of its Promoter Group hold Equity Shares in the Company and therefore, are interested in its performance in addition to their remuneration and reimbursement of expenses. Pursuant to their shareholding they will continue to retain control over the Company after completion of the Offer, which will allow them to influence the outcome of matters submitted for approval of its shareholders. Such a concentration of ownership may also have the effect of delaying, preventing, or deterring a change in control.

This Red Herring Prospectus contains industry information that has been extracted or derived from an industry report prepared by CRISIL Research, which was commissioned and paid for by the Company exclusively for the purpose of the Offer and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.

The Company will not receive the proceeds from the Offer for Sale. One of its Shareholder is selling shares in the Offer and will receive proceeds as part of the Offer for Sale.

This Red Herring Prospectus contains certain non-GAAP measures related to its operations and financial performance that may vary from any standard methodology that is applicable across the industry.

The hospital is vulnerable to failures of its information technology system, which could adversely affect its business.

Its hospitals are susceptible to risks arising on account of fire and other incidents. Pursuant to the nature of the Company`s business any slowdown or shutdown of any unit of its hospitals could interfere with its operations. This may materially and adversely affect its business, cash flows, financial condition, and results of operations.

The hospital`s may be subject to worker unrests and increased wage expenses which could materially and adversely affect its business, financial condition, results of operations and cash flows.