IPO Review: What Nephrocare Health’s ₹871 Crore IPO Means for Investors

Nephrocare Health Services runs a chain of kidney dialysis centres that help people whose kidneys have failed stay alive and live a more normal life through regular dialysis sessions. Its ₹871.05 crore IPO opens from 10-12 December 2025 in the ₹438-₹460 price band, with a minimum investment of about ₹14,720 for 1 lot of 32 shares. In this explainer, you will get a simple walk-through of how Nephrocare makes money, where the IPO money will go, its strengths and risks, how it compares with peers, how rich the valuation is, and what all this could mean for you as a small investor thinking about this issue.​

IPO Overview

• IPO Date: December 10 to December 12, 2025
• Total Issue Size: ₹871.05 crore
• Price Band: ₹438 to ₹460
• Minimum Investment: ₹14,720
• Lot Size: 32 Shares
• Tentative Allotment Date: December 15, 2025
• Listing Date: December 17, 2025 (Tentative)
• GMP: The GMP for the Nephrocare Health IPO is ₹0, reflecting a 0% gain over the issue price, according to Chittorgarh.com.

Disclaimer: GMP is an unofficial indicator and is subject to market volatility.

How Nephrocare Health Makes Money

Nephrocare runs kidney dialysis clinics for patients with End-Stage Renal Disease (ESRD – the last stage where kidneys stop working and the patient needs regular dialysis to stay alive), so demand is steady because most patients need treatment 2-3 times a week for life. It serves these patients, whom it calls “guests”, through 519 clinics in four countries, including 288 cities in India, plus centres in the Philippines, Uzbekistan, and Nepal, and in H1 FY26 alone, it handled about 35,425 patients and 18.7 lakh dialysis sessions, showing a large scale and a critical service footprint.

The company follows an asset-light model (it avoids owning buildings and mostly uses partner hospitals or leased spaces) and earns money mainly through three formats: captive clinics inside private hospitals, PPP clinics with governments, and its own standalone centres, all charging per dialysis session and related services.

• Captive hospital clinics are the largest piece, where Nephrocare runs the dialysis unit inside a partner hospital that provides space (often rent-free) and both share revenue; this format contributed 36.51% of dialysis revenue in H1 FY26, meaning over one-third of each dialysis rupee comes from these units.
• PPP (Public-Private Partnership) clinics work with state and public hospitals that give space and utilities, while Nephrocare manages machines and staff, and the government pays a fixed fee per treatment; PPP units made up 30.96% of dialysis revenue in H1 FY26, so together captive and PPP formats contribute about two-thirds of dialysis income.
• Standalone centres in leased locations, plus at-home services like Dialysis on Call (DoC) and Home Hemodialysis (HHD), where staff and equipment go to the patient’s home, add convenience for people who cannot travel often and bring extra revenue per patient beyond clinic visits.

Objectives of the IPO

The IPO has a total size of ₹871.05 crore, split into a Fresh Issue of ₹353.4 crore and an Offer for Sale (OFS) of ₹517.64 crore; only the Fresh Issue money actually comes to the company, while OFS money goes to existing shareholders who are selling their stake. The key uses of the Fresh Issue are clearly laid out and link directly to growth and debt reduction.​

• Opening 167 new dialysis clinics in India: Nephrocare plans to spend about ₹129.11 crore on capital expenditure to open 167 new clinics over FY26–FY28. In practice, this means more chairs, more machines, and more touchpoints for patients across tier II and tier III cities, which can lift future revenue as each new clinic ramps up to good utilization levels over time.​
• Repaying about ₹136 crore of debt: Another ₹136 crore is earmarked for repayment of certain loans, which will bring down the company’s total borrowings from ₹207 crore (as of 30 September 2025) and cut the interest it has to pay each year.
• General corporate purposes: The remaining amount will be used for general corporate purposes, which typically include supporting working capital (day-to-day cash needs), funding international expansion, upgrading IT systems, and paying for staff, marketing, and professional fees. While this bucket is broad, for a fast-growing, asset-light healthcare chain, it mainly acts as a cushion to support expansion and strengthen the balance sheet.​

A key point here is that after the IPO, net debt (debt minus cash) is expected to swing from about ₹123.41 crore to a net cash position of roughly ₹229.97 crore, giving Nephrocare much more financial breathing room for its planned growth.​

Strengths:

• Nephrocare is a clear market leader in dialysis, being India’s largest player, about 4.4 times bigger than the next organised competitor in FY24, and also the largest in Asia and fifth-largest globally by number of treatments.
• The business is scaling well with better profitability: revenue grew from about ₹440 crore in FY23 to roughly ₹770 crore in FY25 (around 32% annual growth), EBITDA margin improved from 11.11% to 22.05% (23.30% in H1 FY26), and the company swung from a loss of ₹11.8 crore in FY23 to a profit of ₹67.1 crore in FY25, helped by lower material costs and more efficient clinics.
• Unit economics and cash flows look healthy: average revenue per treatment rose from ₹1,912 in FY23 to ₹2,531 in H1 FY26, operating cash flow was about 81% of EBITDA in FY25, and around 40% of revenue now comes from international markets like the Philippines, Uzbekistan, and Nepal, showing a repeatable playbook beyond India and giving geographic diversification.

Risks:

• A big chunk of Nephrocare’s revenue depends on contracts: about 36.5% from captive hospital clinics and 31% from PPP clinics in H1 FY26, so if a key hospital walks away or a PPP tender is lost to a rival, growth and profits can be hit sharply.
• Cash flow is under pressure because payments are slow and debt is present: receivable days are about 127, meaning it waits over four months to get paid, which ties up cash and keeps reliance on borrowings of around ₹207 crore more painful, especially if interest rates rise.
• Operating a multi-country healthcare network brings people, compliance and country risks: high nephrologist churn (over 50-60% in FY24-FY25), cyber fraud of about ₹1.84 crore in Uzbekistan, pending fire NOCs, potential loss of 0% tax benefit in Uzbekistan, and even name confusion with Nephro Care India Limited can all affect service quality, profitability and investor perception.

For detailed information, visit Nephrocare Health’s official IPO page at INDmoney.

Peer Comparison

Here is a simple peer snapshot for key metrics in FY25, based on RHP: Nephrocare is being compared with hospital chains like Narayana Health, Jupiter Life Line, Rainbow Children's, Dr. Agarwal's, Vijaya Diagnostic, Dr. Lal PathLabs, and Metropolis Healthcare.

Source: RHP, internal calculation

• Revenue scale: Nephrocare’s operating revenue in FY25 was about ₹755.8 crore, which is much smaller than multi-speciality hospital chains like Narayana Health at around ₹5,483 crore, but larger than a focused player, Vijaya Diagnostics, at about ₹681.4 crore.
• EBITDA and PAT margins: Nephrocare’s FY25 EBITDA margin of 22.05% is similar to or slightly better than hospital peers like Jupiter (around 23.51%) but well below diagnostic leaders like Vijaya Diagnostics (about 39.95%). However, its PAT margin of 3% is the weakest in the group, with peers showing about 7.5% at the low end to over 21% at the high end, showing that interest and other costs are still eating away a big part of the profit.​
• OCF-to-EBITDA Ratio: Nephrocare converts 81% of its operating profit into real cash, which is slightly better than big names like Narayana Health (78%) but a bit behind the most efficient players like Metropolis (87%). Its cash conversion is close to the peer average of 82%, showing it turns most of its profits into usable cash.

IPO Valuation

Nephrocare seems to be asking for a premium valuation because it is a clear leader in a niche, underserved healthcare space with strong growth prospects. Based on FY25 earnings, the pre-IPO P/E (price-to-earnings ratio - how many rupees investors pay for each rupee of profit) works out to about 57.4 times, and on the post-IPO, H1 FY26 annualised profit numbers, the P/E shoots up to about 162.2 times, with a post IPO market cap of ₹4,615 crore. When you compare this with a peer average of around 75.4 times, the stock clearly looks aggressively priced, meaning investors are being asked to pay a high price today for a business whose future profit is expected to grow meaningfully.​

Why the P/E jumps post-IPO: The post-IPO P/E is much higher, mainly because the number of shares goes up immediately after the issue, but the extra capital from the IPO will take time to be deployed into new clinics and start showing up in profit. So on today’s earnings, the share looks expensive, but if management executes its expansion plan and margins stay strong, the earnings can “grow into” this high valuation over the next few years.​

In short, the issue is not cheap; it is a “growth plus leadership” story where you pay up now if you believe the company will keep scaling fast and defend its strong position in dialysis.

Who’s Making Money from the IPO?

The Offer for Sale (OFS) portion of about ₹517.64 crore means existing shareholders are selling some of their shares to public investors at the IPO price, and the company itself does not receive this money. Here, a mix of promoter and financial investors are partially cashing out, and the OFS size is actually larger than the Fresh Issue, which raises a natural question on how much of the IPO is about growth money versus investor exit.​

Key sellers include International Finance Corporation (IFC), which is cashing out the largest amount of about ₹142.12 crore and is making a return of around 8.4 times its original investment, indicating a very strong payoff for this early institutional investor. Among promoters, Edoras Investment Holdings Pte. Ltd. is selling around ₹132.89 crore worth of shares at about 1.9 times returns, Healthcare Parent Limited is exiting about ₹73.83 crore at about 4.9 times, and Investcorp Private Equity Fund II is selling ₹70 crore at roughly 5 times returns, while other funds like 360 One Special Opportunities and smaller Investcorp vehicles are also partially exiting with significant returns.

Analyst View

Nephrocare offers a mix of strong structural positives and clear execution and valuation risks, and it is important to weigh both sides carefully.

On the positive side, it sits in the sweet spot of a critical, non-discretionary healthcare service with multi-decade demand, is the clear leader in India by a wide margin, and has already proven it can scale in other emerging markets. Revenue and EBITDA have grown rapidly, margins have expanded, and the move from net debt to net cash post-IPO gives it the financial stability to roll out 167 new clinics without stretching the balance sheet too much.​

On the risk side, the business depends heavily on hospital and government contracts, suffers from long payment cycles, and needs a steady supply of specialist doctors and trained technicians, all of which can become bottlenecks if not managed well. The H1 FY26 net profit margin of around 3% and low RoE show that, for now, a big part of operating gains gets eaten up by finance and other costs, and the valuation, especially the post-IPO P/E north of 160 times on annualised H1 FY26 earnings, leaves little room for major execution mistakes.​

For cautious, well-informed investors who believe in the long-term dialysis theme and in Nephrocare’s ability to keep winning and retaining contracts, expand in smaller cities, and improve RoE over the next 3-5 years, this can be seen as a medium-to-long-term growth bet rather than a quick listing flip. However, anyone with a very short time horizon or low risk appetite should recognise that this is a richly priced issue with contract and cash-flow risks, so they should size any investment carefully and be mentally prepared for volatility if execution or growth slows down.​

For a seamless application process, visit the INDmoney IPO page.

Disclaimer

Source: Nephrocare Health's RHP. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Please be informed that merely opening a trading and demat account will not guarantee investment in securities in the IPO. Investors are requested to do their own independent research and due diligence before investing in an IPO. Please read the SEBI-prescribed Combined Risk Disclosure Document prior to investing. This post is for general information and awareness purposes only and is nowhere to be considered as advice, recommendation, or solicitation of an offer to buy or sell, or subscribe for securities. INDstocks is acting as a distributor for non-broking products/services such as IPO, Mutual Fund, and Mutual Fund SIP. These are not exchange-traded products. All disputes with respect to the distribution activity would not have access to the Exchange investor redressal forum or the Arbitration mechanism. INDstocks Private Limited (formerly known as INDmoney Private Limited) does not provide any portfolio management services, nor is it an investment adviser. Logos above are the property of respective trademark owners, and by displaying them, INDstocks has no right, title, or interest in them. SEBI Stock Broking Registration No: INZ000305337, Trading and Clearing Member of NSE (90267, M70042) and BSE, BSE StarMF (6779), SEBI Depository Participant Reg. No. IN-DP-690-2022, Depository Participant ID: CDSL 12095500, Research Analyst Registration No. INH000018948 BSE RA Enlistment No. 6428.