Block Deal Alert of Rs 392.10 Crore: Krishna Institute of Medical Sciences

On August 28, 2024, a significant block deal involving Krishna Institute of Medical Sciences (KIMS) grabbed the market’s attention. Shares worth an estimated Rs 392.10 crore were traded in this transaction, with approximately 15.7 lakh shares, representing a 2% stake in the company, changing hands. The shares were traded at a floor price of Rs 2,497 apiece, reflecting a slight discount of just over 1% to the previous closing price.

Despite the sizable transaction, the identities of the buyers and sellers involved in this block deal remain undisclosed at this time.

Market Reaction: A Knee-Jerk Response

Following the block deal, KIMS’ stock experienced a mild but notable decline. As of 10:00 AM on the same day, the stock had dropped by 1.76%, trading at Rs 2,484 on the National Stock Exchange (NSE). This slight pullback was likely a knee-jerk reaction as market participants processed the implications of the large-scale transaction.

KIMS: A Leader in Multispecialty Healthcare

Krishna Institute of Medical Sciences, founded by the esteemed cardiothoracic surgeon Dr. Bhaskar Rao Bollineni, has carved out a prominent position in India’s healthcare sector. KIMS operates a chain of multispecialty hospitals primarily in the states of Andhra Pradesh and Telangana, focusing on tertiary and quaternary healthcare services.

Since its inception in 2004 with a 300-bed hospital in Secunderabad, KIMS has expanded its footprint significantly. Today, the flagship hospital in Secunderabad boasts a capacity of 1,000 beds, while the entire network of KIMS hospitals across eight cities in Andhra Pradesh and Telangana has a total bed capacity of 3,064 beds. This extensive network underscores KIMS’ strong presence in the southern region of India.

Ownership Structure: Key Stakeholders

The ownership of KIMS is diversified among several key stakeholders. Dr. Bhaskar Rao, along with his associate firm and relatives, holds a substantial 38.8% stake in the company. Additionally, General Atlantic, through its entity General Atlantic Singapore KH Pte Ltd, holds a 17% stake. The remaining shares are held by institutional investors, the general public, and even doctors associated with the KIMS hospitals.

In a notable development back in June 2018, General Atlantic made a strategic investment of over USD 130 million in KIMS. This investment was a mix of primary capital and secondary purchases, resulting in General Atlantic acquiring a significant minority stake of 42.6% in the company. As part of this transaction, General Atlantic took over a 30% stake previously held by the India Advantage Fund, India’s largest private equity fund managed by ICICI Ventures.

Stock Performance: A Strong 2024 So Far

KIMS has delivered robust returns to its investors in 2024. The stock has appreciated by 25.5% year-to-date, reflecting strong investor confidence and the company’s solid performance. Furthermore, in the month of August alone, the stock has gained 15.3%, signaling continued positive momentum.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.