VFS Healthcare and IHC owned Response Plus Medical Holdings comes to ADX at a time when healthcare assets are hot property. Image Credit: Supplied

Response Plus Medical Holding, with a share capital of Dh200 million, has filed its prospectus with ADX for listing. The Abu Dhabi health services firm is an exciting company for UAE investors.

It provides efficient and comprehensive primary and secondary healthcare solutions at remote locations for medical and non-medical organizations, as well as operate medical facilities and critical care units. Its customers are in the oil and gas industries, construction sites, educational institutions, airports, and seaports in the GCC, with marquee clients being Emirates Global Aluminium, ADNOC, NMDC, Schlumberger, Hyundai, and Samsung Engineering.

Shares surge
The shares of the company rose 2000% in the first hours of trading - and giving it a market cap of Dh4 billion.

What sets apart the company from its rivals is its management, with Dr. Shamsheer Vayalil Parambath holding 49 per cent, Alpha Dhabi Health has a stake of 36 per cent, while Chimera Investment owns 10 per cent. Dr. Vayalil is Chairman and Managing Director of VPS Healthcare, which has 24 hospitals, over 125 health centres, more than 13,000 employees, and one of the largest pharmaceutical manufacturing plants in the UAE. Alpha Dhabi is a subsidiary of International Holdings Co, the mega private investment firm.

Second Market listings
RPM is the 13th company to list on ADX’s 'Second Market' since it was established in 2014. Market capitalization of the Second Market, by the end of August, reached Dh38 billion - an increase of 273% compared to the same period last year.

Good connections

Response Plus manages more than 260 site clinics and operates the largest private fleet of ambulances in Abu Dhabi. This gives the firm the competitive advantage of responding immediately to emergency scenarios. Customers know this and have entered long-term contracts. These give visibility to the company’s future cashflow and earnings. Moreover, it will seek to replicate its success in UAE into other GCC countries. RPM recently bagged a contract for Damman International Airport and is in discussions with Saudi Aramco and British Petroleum. The Group is also finalizing its licenses in India, and intends to open a branch or a company shortly.

Stock - ADX Second Market Listing
The ADX Second Market gets another listing, this time from Response Plus Medical Holding. Image Credit: Gulf News Archives

Privatisation plays

A critical macroeconomic tailwind for the company is the growing share of the private sector in healthcare spending across GCC. This is likely to grow further with the issuance of mandatory health insurance schemes. Another supporting factor is the accelerated privatization programme in Saudi Arabia, which is expected to provide more significant opportunities to private healthcare operators. RPM hopefully should be able to replicate the model implemented with companies like ADNOC and NMDC in Saudi Arabia.

The revenues have grown from Dh139.7 million in 2019 to Dh241.9 million in 2020, while EBITDA rose sharply from Dh36.1 million to Dh61.2 million. The substantial revenue and earnings growth make this an attractive choice.