Paras Health IPO

Easy to miss in the prospectus

• The price band of ₹660–693 and the lot of 21 shares are NOT in the RHP, which prints [●] for both. They come from the pre-issue advertisement as reported in the press. Everything else here is from the filing.
• The P/E shown on this page is "not disclosed" because the RHP leaves the post-issue share count at [●], so no post-issue multiple can be built. On the FY26 diluted EPS of ₹4.34 that the RHP does state, the ₹660–693 band works out at about 152–160 times — a computation, not a disclosure.
• The headline bed count overstates the working business. "2,211 beds" is planned civil capacity; only 1,502 beds (67.93%) are operational. The much-quoted 61.75% FY26 occupancy is measured against operational beds — against total capacity it is roughly 42%. Growth in capacity has not translated into operational beds: the ratio was 68.62% in FY25 and is 67.93% now.
• ARPOB went DOWN, not up. Average revenue per occupied bed fell from ₹48,088.57/day in FY25 to ₹47,397.82/day in FY26. All of FY26's revenue growth came from volume and occupancy, not pricing. The sharpest fall was Srinagar, from ₹62,401.30 to ₹36,532.56, as the hospital filled with lower-realisation cases — the same hospital whose occupancy jump is sold as a strength.
• FY24 showed a positive PBT of ₹6.63 Cr but a negative PAT of ₹(15.33) Cr. India has no group taxation, so the profitable parent paid ₹20.18 Cr of current tax while the subsidiaries' losses could not offset it. The same arithmetic put FY26's effective tax rate at 42.3% on PBT of ₹76.03 Cr. Until the subsidiaries turn, consolidated PAT will keep lagging consolidated PBT.
• Do not annualise Q1 FY27. PAT of ₹49.68 Cr for the quarter already exceeds all of FY26 (₹43.83 Cr) and exceeds the quarter's own PBT of ₹48.12 Cr — because of a ₹16.22 Cr deferred tax credit. Strip it out and quarterly PAT is closer to ₹33.5 Cr.
• The scary contingent-liability number is mostly already gone. Contingent liabilities of ₹398.44 Cr equal 89.55% of net worth, but ₹298.62 Cr of that is a guarantee PMHPL gave for the Company's OWN HDFC Bank facilities, and HDFC waived both it and the ₹31.94 Cr reciprocal guarantee after 30 June 2026 (revised sanction letters dated 25 July and 7 August 2026). Genuine third-party exposure is nearer ₹67.89 Cr. The FY25 figure of 135.33% of net worth has the same character.
• Valuation looks demanding against the RHP's own peer table. COMPUTED, not printed in the RHP: at the ₹660-693 band (from the pre-issue advertisement) against FY26 diluted EPS of ₹4.34 (RHP), the P/E is about 152x-160x. The RHP's own peer group averages 67.81x, with the highest at 116.41x (KIMS) and lowest at 42.92x (Jupiter). The RHP leaves its own P/E as [●].
• An unresolved revenue-integrity allegation is disclosed weeks before the issue. On 25 August and 4 September 2026 the company received anonymous complaints alleging that employees were inflating revenue at the Paras Labs central reference laboratory in Gurugram by registering tests billed at the Gurugram Hospital a second time at the lab, producing duplicate revenue entries — plus allegations about reports issued without physical samples. An independent third-party investigation was still ONGOING at the date of the RHP.
• Two-thirds of the money does not reach the company. Of the ₹1,450 Cr issue, ₹950 Cr is an offer for sale going to the promoter (₹300 Cr) and Commelina Ltd (₹650 Cr). Of the ₹500 Cr fresh issue, only ₹375.00 Cr is earmarked — ₹320.90 Cr to repay company borrowings and ₹54.10 Cr into PMHPL — with general corporate purposes left at [●]. No new hospital capex is funded by this issue.
• Cost of acquisition is wildly asymmetric. The promoter's weighted average cost is ₹2.35 per share against Commelina's ₹114.15; the all-shareholder WACA over the last three years is ₹43.15. At the top of the band the promoter is selling at roughly 295x his own average cost.
• Reg 6(2) route means thin retail allocation and a hard QIB floor. The company does not meet Regulation 6(1)(a) because more than half its net tangible assets ARE held in monetary assets, which Regulation 6(1)(a) caps at 50%, so at least 75% must be allotted to QIBs, no more than 10% is reserved for retail — and if 75% cannot be allotted to QIBs the entire application money is refunded.
• The brand is not actually owned. There is no registered trademark for the word "Paras", no formal arrangement governing the promoter group's use of the name, and 25 of the 29 trademark applications filed for the new logos have been opposed.
• Corporate history is patchy. The entity was incorporated in 1987 as Arbian Frozen Foods Private Limited and only entered healthcare in 2003; board and shareholder resolutions and RoC filings from 1988, 1993, 1997, 2003 and 2006 are untraceable, and the RHP flags factual inaccuracies in some corporate records.
• The Ranchi hospital is a PPP with Heavy Engineering Corporation carrying a live ₹2.75 Cr liquidated-damages notice for delay in opening a 50-bed facility, backed by a ₹7.50 Cr bank guarantee — and its concession lease deed is unregistered.