Highlights
| Issue Size: 18,795,510 shares | Issue Open/Close: 12 Dec / 16 Dec, 2024 |
| Price Band (Rs.): 1265 – 1329 | Issue Size (Rs.): 24,979 mn |
| Face Value (Rs): 1 | Lot Size (shares): 11 |
Inventurus Knowledge Solutions Limited (IKSL), incorporated on 2006, is a technology-enabled healthcare solutions provider and offer a care enablement platform assisting physician enterprises in the US, Canada and Australia, with a focus on the US markets.
They are a partner for outpatient and inpatient care organizations, enabling healthcare organizations deliver superior clinical care, improve population health outcomes, and transition to the fee for value model while optimizing their revenue and reducing operating costs.
IKSL healthcare provider enablement platform helps healthcare providers focus more singularly on their core role of patient care, while empowering healthcare organizations to thrive.
They take on the chores of healthcare, spanning administrative, clinical, and operational services through proprietary technology platforms, so that physicians can focus on their core purpose of delivering care to patients. Combining technology, dedicated resources and clinically-trained employees, their solutions enable stronger and financially sustainable healthcare enterprises.
As of Q2FY25, they have 778 healthcare organizations as their clients, including health systems, academic medical centres, multi-specialty medical groups, single-specialty medical groups, ancillary healthcare organizations and other outpatient and inpatient healthcare delivery organizations. Some of their key clients include Mass General Brigham Inc., Texas Health Care PLLC, and The GI Alliance Management.
Out of the total proceeds of Rs. 24,979 mn, Rs. 24,979 mn would go towards existing selling shareholders of the company. As company expects that listing of the Equity Shares will enhance their visibility and brand image and provide liquidity to their Shareholders and will also provide a public market for the Equity Shares in India.
Key Highlights
- Health expenditure in the US is projected to grow from USD 4,799 bn in 2023 to USD 6,216 bn by 2028, reflecting a CAGR of 5.3 pct. This growth will be driven by an ageing population and a rise in chronic diseases. The total addressable market for provider enablement technology solutions in the US is expected to reach USD 323 bn by 2028.
- IKSL solutions are customised for each client, with a dedicated team leveraging the institutional knowledge of client’s business and dedicated managers responsible for delivering results acting as liaisons between the client and operations. This depth helps them to build long-term relationships with clients, which increases the revenue generated per unit cost of servicing and managing each client engagement, increases opportunities for cross selling and achieving greater revenue from each engagement.
- IKSL also use robotic process automation (RPA) to help automate structured and repetitive processes on virtual desktop/ application environments, including routine payer interactions, and rebilling claims processes such as identifying claim status by checking payer websites, and managing eligibility inquiries and rebilling of claims.
- The revenue IKSL earn contractually is typically based on (i) the outcomes they deliver –their revenue cycle fees would be a certain percentage of payments that IKSL help their clients collect, (ii) the volume of transactions they handle, such as a predetermined amount based on per prescription refill that process, per medical chart that they code, per page of clinical charts that they abstract into the EHR, among others; and (iii) monthly fees, such as a predetermined amount per month per physician for their clinical documentation service.
- Their pricing strategy aims to grow revenue corresponding to clients’ business. As clients progressively acquire new medical groups, open new clinics, hire more physicians, increase their patient volumes, IKSL benefit from this growth. It also helps to expand profit margins in a non-linear manner.
- IKSL key strategy includes (i) Maximise revenue from existing clients through a land and expand approach (ii) Focus on large healthcare organizations (iii) Move from a human-led tech-enabled model to a tech-led human-enabled model (iv) Bundling their solutions for greater value-add (v) Leverage automation and Generative AI to aid operations (vi) Partner with innovative clients for product development and innovation (vii) Develop solutions to address the needs of entities moving to Value-Based Care.
- Sales of the company has grown by 54.29 pct CAGR over FY22-24 to Rs. 8750 mn While EBITDA and adjusted profit grew 36.94 pct and 31.07 pct CAGR over same year. EBITDA rose by 44.4 pct YoY to Rs. 5,203 mn. Additionally, the company posted profit of Rs. 4,354 mn in FY24, which grew 29.4 pct YoY. In H1FY25 the sales/EBITDA/ adjusted profit grew 103 pct YoY/55 pct YoY/17 pct YoY.
Key Risks:
- IKSL sales are primarily dependent on sales generated from healthcare organizations based in the United States, and as a result, they are subject to the risks of sector and geographic concentration.
- Various challenges currently faced by the healthcare industry in the United States including the provision of quality healthcare in a competitive environment and managing costs at the same time and consolidation of healthcare organizations in the United States may adversely affect IKSL business.
Financial Performance:
| (In Rs. mn, unless otherwise stated) | FY22 | FY23 | FY24 | H1FY24 | H1FY25 |
|---|---|---|---|---|---|
| Sales | 7,636 | 10,313 | 18,179 | 18,179 | 12,829 |
| EBITDA | 2,774 | 3,604 | 5,203 | 2,322 | 3,591 |
| EBITDA Margin % | 36.33% | 34.95% | 28.62% | 36.81% | 27.99% |
| Adjusted Profit | 2,534 | 3,366 | 4,354 | 2,057 | 2,402 |
| Adjusted Profit Margin % | 33.19% | 32.64% | 23.95% | 32.60% | 18.73% |
| ROE % | 36.00% | 36.83% | 32.00% | 23.29% | 15.15% |
| ROCE % | 49.82% | 49.43% | 31.56% | 28% | 13.79% |
Valuation
Inventurus Knowledge Solutions Limited (IKSL) is on a mission to enable the efficient delivery of high-quality care through a combination of leading-edge technology and human expertise They are redefining the future of Care Enablement and creating transformative value in healthcare by empowering clinicians to build healthier communities and enabling stronger, financially sustainable enterprises.
At the upper end of the price of Rs. 1329, the issue quotes PE of 55x of its FY25 annualized earnings. The issue looks appears to be fully priced. One can subscribe this issue from a longer-term perspective.
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