Mittal School of Business

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ANNEXURE:1

Course Code: FINM542 Course Title: CORPORATE FINANCE - I

Course Instructor: Dr. Monik Kalani Section: Q2255
Academic Task No: CA-1 Academic Task Title: CA – 1 REPORT
Max. Marks: 30 Marks Obtained:
Evaluation Parameters: As per rubrics

Learning Outcome
We have learnt about various financial decisions, investments decisions, sources of finance
and analyzing the decisions that impact the organization in terms of finance
Declaration:
We declare that this CA is our individual work. We have not copied it from any other
students’ workor from any other source except where due acknowledgement is made
explicitly in the text, norhas any part been written for us by any other person.

Student Signature:

Evaluator’s Comments (For Instructor’s use only)

Best part of the

General Observations Suggestions for Improvement Assignment

Evaluator’s Signature and Date:

 TOPIC: - Narayana Hrudayalaya Ltd.
Peer Ratings

Group No. Registration Section Class Name of PEER Reason for Work
for Number Roll Student Rating Giving done by
Assignment No. PEER the
Rating person

G:02 12209726 Q2255 B38 Pratyaksh 5 Equal 6 News

Mishra Contribution Analysis
Given by Done
both the team
Member.

G:02 12202231 Q2255 A07 Simran 5 Equal 6 News

Sharma Contribution Analysis
Given by Done
both the team
Member.
 Introduction
Narayana Hrudayalaya Ltd.

With its headquarters in Bengaluru, India, Narayana Health (formerly known as Narayana
Hrudayalaya) is an Indian chain of multi-specialty hospitals, cardiac centers, and primary
care institutions. In the year 2000, Dr. Devi Shetty started it. Narayana Health manages a
network of hospitals all across the nation. It is notably well-known in eastern India and the
eastern state of Karnataka, as well as in northern, western, and central India. With about 225
operational beds, our first facility was built in Bengaluru. Since then, we have expanded to
include six cardiac centers, 19 primary care institutions across India, 21 hospitals, plus one in
the Cayman Islands. Due to a combination of greenfield construction projects and
acquisitions, the group today has over 5,859 operating beds.

We think the "Narayana Health" brand is closely related to our goal of making high-quality,
inexpensive healthcare services available to a larger audience by utilizing our economies of
scale, qualified medical professionals, and an effective business strategy.

Over 30 medical specialties, including cardiology and cardiac surgery, cancer treatment,
neurology and neurosurgery, orthopedics, nephrology and urology, and gastroenterology, are
collectively served at advanced levels by our centers.

Mission:
Our goal is to provide more people in India with high-quality, affordable healthcare services.
The letters "iCare," which stand for innovation and efficiency, compassionate care,
accountability, respect for everyone, and excellence as a culture, stand for our key principles.
Through the implementation of our company strategy, we also aim to provide a solid
financial performance and provide long-term value to our shareholders.
 NARAYANA HRUDAYALAYA LTD. NEWS
1.

Finance Function: - Investment Decision

Date of Decision: - 6th December 2021

Reason: - Making healthcare affordable and accessible to all and make revenue
out of the new infra.

Interpretation: -

The company aims at delivering high-quality, affordable healthcare services to

the broader population of India. This Multi-Speciality Hospital in Ludhiana is
another step towards realization of their vision.

With this decision the company is trying towards making healthcare affordable
and accessible to all and I believe that this project will open doors for various
future partnerships with other companies and will strengthen the company’s
vision to provide quality & low-cost healthcare to all.

This Decision of the company will help create relationships with other companies
and grow its reputation in the people’s perception. It will also help the company
to increase its revenue as new opportunities will open with new infrastructure
thus increase in the long-term profits of the company and increase in the profits
directly results in growth of the company.
With profits the wealth increases and this will allow the company to open
business in different locations and cashflow for further collaborations.

2.

Finance Function: - Investment Decision

Date of Decision: - 6th September 2022

Reason: - Generate new healthy margins & profitability from the new Cayman
unit.

Interpretation: -

This decision of the company directly resulted in the increase of share price with
2.5% the reason behind the rise in the share price is that this decision will offer
the entire spectrum of services in Health City. The company said that this will
have a little impact on financials given the deal size is big, besides the said
acquisition is in-line with guidance of 80 crores capex as guided by mgmt. for
financial year and the company has also agreed to pay Rs 200 crores upfront

I believe Narayana Hrudayalaya aggressive plans in India along with Cayman

operations in the next 2-3 years will boost the growth visibility beyond FY24.

Moreover, the company's ability to generate healthy margins & profitability in

the new Cayman unit will be a key noticeable point.
These decisions will help the company to expand and if give the confidence to
the company for further acquisition of companies or make subsidiaries in coming
future.

3.

Finance Function: - Investment Decision

Date of Decision: - 6th September 2022

Reason: - Acquisition of the company will increase the operations

Interpretation: -

This decision of the company will add the orthopaedic speciality and will
supplement the other specialities of its Health City operations by supporting
trauma patients for cardiac, renal, pulmonary, neuro and other multi-organ
treatments, thereby increasing the breadth of our multispecialty program at our
flagship campus.

This decision of the company will act both as a social cause and a profitable
decision also as The unit which the company has acquired has generated
operating revenues of over Rs 49 crore in FY22 and over Rs 18 crore for the four
months period ending July 31, 2022, and if the positions of the unit continues in
future under the assistance of the Narayana Hrudayalaya it will help the company
with expanding its operations in the country and if the efficiency continues the
company can also expand its operations in different companies.

As the acquisition of the company will increase the operations it will also increase
the earning base of the company thus increase in share price and make the
investors happy and more happy stakeholders more the investments in coming
future.

4.

Finance Function: - Investment Decision

Date of Decision: - 16th August 2022

Reason: - Expand to over 15 cities in India by the end of this year.

Interpretation: -

The owner of Narayana Hyudayalaya has claimed the partnership with the top 50
hospital and looking to expand to over 15 cities in India by the end of this year.

As the company collaborating with different hospital and helping in facilitating

2500 beds and approx. 10,000 patients.
This will help to increase the goodwill of the company as well as the profit of the
company. Higher profits enable firm to invest in more research and development
leading to better result in long term thus increase in the share of price.

And if the wealth increases due to the rise in profits it will allow the company to
open business in other locations, acquire other subsidiaries business, target other
markets, locations and expand their operations into foreign territories also.

5.

Finance Function: - Investment Decision

Date of Decision: - 28th march 2018

Reason: - Merger of tow company for improvement of technology in the

companies.

Interpretation: -

This is a positive news in regarding of the company as it will help the company
in expansion and increasing the capacity of the Hospitals of the company. The
resources of the company that will merge will also come together that will result
in better working of the operations of the company.

With the help of the resources of both the company it will help them for Having
greater economic power and lead to higher market share, more influence over
customers, and reduced competitive threat.
But one of the outcomes of this merger is it will result in increase in operational
expenses in the initial stage. an increase in any type of business expense lowers
profit. Operating expenses are only one type of expense that reduces net sales to
reach net profit.

Thus, it may impact the share price of the company in a negative way also in
short-term but in the long term it will surely give positive results.

6.

Finance Function: - Investment Decision

Date of Decision: - 04th December 2021

Reason: - Provide healthcare & diagnostic facilities to the people of Punjab.

Interpretations: -

With this decision of the company, it will be set up in Hampton project on NH-
05 (Ludhiana-Chandigarh Highway) and will be spread over 2 Lakh sq. ft. with a
capacity of 225 beds.

The hospital will provide healthcare & diagnostic facilities to the people of
Punjab. The hospital will be operational by 2024 and will be first ever multi-
speciality hospital in the state.
With this big project the company will need finance that may create long term
debts in the company and may affect the decisions of the investors.

But as the project is a visionary project and has the capability to build a complete
ecosystem and enable overall development of the company it will surely give
profits and great revenue in long terms.

Thus, by my point of view this decision of the company will help the company
gain better results in terms of profit and recognition in the market.

7.

Decision type: - Investment Decision

Date of Decision: - 01st July 2022

Reason: - Expand outside of Caribbean market and involve more Foreign

Currency in its operations.

Interpretation: -

Caribbean operations bringing the company close to the US markets

And the company is thinking to expand outside of Caribbean also as the market
size is small look for new opportunities in the global market. These decisions are
long term decision and will take time to happen.
And from this decision of the company the company is trying to sustain revenue
growth and output growth as between the covid time the company has increased
its capacity and operations a lot and now the demand is gradually decreasing in
many places.

So, the operating cost is not reducing but the revenue is decreasing as compared
to the COVID time.

The company wants to overcome this situation from this decision and as the
company is taking steps to control and direct the company in right path it will
impact the price of share in positive form.

8.

Decision type: - Financial Decision

Date of Decision: - 09th September 2022

Reason: - To invest $100 Million more in Cayman Island to build 50-bed super
specialty healthcare facility.

Interpretation: -

The company Decided to invest $100 Million more in Cayman Island to build
50-bed super specialty healthcare facility.

Health City Cayman Islands Ltd (HCCI), a subsidiary of Narayana Hrudayalaya

Ltd running a hospital in the Cayman Islands, plans to expand to a new location
in the Camana Bay Development area of Grand Cayman.
The company is going to acquire the funds from internal accruals of HCCI and
borrowing from banks and financial institutions the expansion is going to be of
a huge value as much as $100 Million.

The new hospital is expected to have 50 operating beds and the facility is
planned on a 3-acre plot of land. The total construction and commissioning time
is estimated at 24 months, with a radiotherapy center expected to be
commissioned in 12 months.

Thus, the decision is of a financial decision and the company is trying to expand
more in the different countries and as the company is funding the amount from
outsiders funds the company’s debt will increase and if the company’s debt will
be shown higher in the balance sheet this will affect the investors decision in a
negative way.

This can also be a negative point for share price of the company.

9.

Decision type: - Financial Decision

Date of Decision: - 09th August 2022

Reason: - This is a news about the increase of the profits by comparing two years.

Net Sales at Rs 1,033.43 crore in June 2022 up 20.19% from Rs. 859.80 crore in
June 2021. Quarterly Net Profit at Rs. 110.55 crore in June 2022 up 45.12%
from Rs. 76.18 crore in June 2021. EBITDA stands at Rs. 199.98 crore in June
2022 up 42.48% from Rs. 140.36 crore in June 2021. Narayana Hruda EPS has
increased to Rs. 5.45 in June 2022 from Rs. 3.75 in June 2021. Narayana Hruda
shares closed at 634.20 on August 05, 2022 (NSE) and has given -3.46% returns
over the last 6 months and 19.97% over the last 12 months.

Interpretation: -

The company’s profits are rising by 45.12% that implies the company has
improved its working culture and reduced the cost incurred in services, and must
have reduced other expenses of the company that is resulting in smooth
functioning of the company’s operations.

The company is having enough profits before Income Tax and Dividend and this
has risen about 42.48% so the company will be able to give extra dividend
compared to last year.

As the news shows and the analysis done by us the EPS increased to Rs. 5.45 in
June 2022 from Rs. 3.75 in June 2021, this gives a good indication about the
health of the company and gives higher return to the shareholders.

This will boost the confidence of the shareholders and if investors believe a
company is making more money than its share price suggests, they will pay more
for its shares.

10.

Decision type: - Financial Decision

Date of Decision: - 09th September 2022

Reason: - Create strategic partnership of Narayana Health with other companies.

Interpretation: -

Siemens Healthiness, the German MedTech company on Friday said it has

entered into a strategic partnership with Narayana Health, HealthCare Global
Enterprises and Indian Institute of Science (IISc), to bolster digital healthcare at
its innovation center in Bommasandra, Bengaluru.

The partnership with Narayana Health will focus on advancing cardiovascular

care and digital transformation in healthcare by building on the capabilities
from both organizations.

As the Partnership is bringing new while the tie-up with HCG aims to make
cancer care more personalized through the application of diagnostic imaging
technologies and artificial intelligence.

The partnership of the two company is bringing new resources and technology
for our company and as the technology will update Haryana Hudrayalaya will
be able to give more quality services to its customers and if the customer
satisfaction rate increases the revenue will increase.

Thus, resulting in increase in profits and increase in profits will directly result in
increase in wealth and increase of the share price.

11.

Decision type: - Working Capital Decision

Date of Decision: - 27th August 2022

Reason: - This is the news about the share price of the company in Long & Short
Term.

Interpretation: -

It's not uncommon to see a share price retrace a bit, after a big gain. If the
business can perform well for years to come, then the recent drop could be an
opportunity.

Narayana Hrudayalaya shareholders have received a total shareholder return of

67% over one year. That gain is better than the annual TSR over five years,
which is 17%. Therefore, it seems like sentiment around the company has been
positive lately.

This news shows that the decisions made by the company are long-term
financial decisions as when the company makes any decision there is a negative
impact in the short-term but the company Is always able to make the share
holders happy by its decision by the Long-term perspective.

This builds the confidence in the shareholders that if they are not getting profits
in short0terms they will be compensated in the Long-term.

Thus, will increase the price of share.

 12.

Decision type: - Dividend Decision

Date of Decision: - 22nd march 2022

Reason: - Announcement of Dividend in the company

Interpretation: -

The Narayana Hrudayalaya Company has decided to give the dividend to their
shareholder with the consolidation of Board of Director. Meeting was held with
the Board of Director & with the approval of shareholders the company decided
to give final share of ₹1.0 per share.

Special share would be given to each of the shareholder from the profits of the
company. This will increase the confidence of the shareholder & the company's
goodwill too Moreover they are likely to stick with the company for the long
term. So, with the consolidation with AGM (Annual General Meeting; where all
the BOD and shareholder meet once in a year) This dividend announced for the
shareholder to boost up their confidence and it may be started after 22 August
2022.

Every business entity should take such profit-sharing decisions by keeping the
sake of their shareholders in mind to induce more and more people to invest in
their company.

References: -

1. https://www.indiainfoline.com/article/news-top-story/narayana-
hrudayalaya-ties-with-ritesh-properties-to-foray-into-punjab-by-setting-
up-multi-speciality-hospital-in-ludhiana-121120600017_1.html
2. https://www.indiainfoline.com/article/news-top-story/narayana-
hrudayalaya-to-subscribe-rs80-crore-ocds-of-shiva-shiva-orthopaedic-
hospital-stock-climbs-2-5-122090600384_1.html
3. https://www.indiainfoline.com/article/news-top-story/narayana-
hrudayalaya-to-subscribe-rs80-crore-ocds-of-shiva-shiva-orthopaedic-
hospital-stock-climbs-2-5-122090600384_1.html
4. https://www.moneycontrol.com/news/trends/current-affairs-
trends/stanplus-narayana-hrudayalaya-partner-to-provide-emergency-
response-within-15-minutes-in-bengaluru-9037661.html
5. https://www.moneycontrol.com/news/business/companies/legacy-of-
fortis-manipal-coming-together-is-quite-positive-narayana-health-
2538397.html
6. https://www.business-standard.com/article/news-cm/narayana-
hrudayalaya-to-set-up-multi-speciality-hospital-in-ludhiana-
121120400561_1.html
7. https://www.business-standard.com/article/companies/our-caribbean-ops-
bring-us-close-to-us-mkt-narayana-health-s-viren-shetty-
122062600538_1.html
8. https://economictimes.indiatimes.com/industry/healthcare/biotech/healthc
are/siemens-healthineers-enters-pact-with-narayana-hcg-iisc-for-digital-
healthcare-innovations/articleshow/94102304.cms
9. https://www.moneycontrol.com/news/business/earnings/narayana-hruda-
consolidated-june-2022-net-sales-at-rs-1033-43-crore-up-20-19-y-o-y-
8985131.html
10.https://economictimes.indiatimes.com/industry/healthcare/biotech/healthc
are/siemens-healthineers-enters-pact-with-narayana-hcg-iisc-for-digital-
healthcare-innovations/articleshow/94102304.cms
11.https://simplywall.st/stocks/in/healthcare/nse-nh/narayana-hrudayalaya-
shares/news/the-total-return-for-narayana-hrudayalaya-nsenh-investors-
ha
12.https://groww.in/stocks/narayana-hrudayalaya-ltd/corporate-actions