Hospital chain Global Health, which operates Medanta, will look to repay ₹375 crore of its debt out of the IPO proceeds. The company’s upcoming IPO comprises a fresh issue of ₹500 crore.
The ₹2,205-crore IPO will open for subscription on November 3 and close on November 7. This includes fresh issue of ₹500 crore, and an offer for sale of up to ₹1,705 crore through the sale of 5.08 crore equity shares by shareholders and promoters. The price band of the IPO is at ₹319-336 a share.
The Carlyle Group, which currently holds 20-per cent stake in the Dr Naresh Trehan-promoted Global Health, will make a full exit
According to Sanjeev Kumar, Group CFO, Medanta, the debt of two of its subsidiaries — MHPL (Lucknow) and GHPPL (Patna) — would be repaid. This would lead to reduction of interest costs and a strengthening of its balance sheet.
Currently, interest cost is around 8.4 per cent and post repayment, the bottomline is expected to see a boost of ₹25-30 crore. Debt on the company’s books as on June 30 is around ₹840 crore.
“The balance amount of the net proceeds will be used for general corporate purposes,” he told businessline.
Carlyle pre-IPO deals
The US-based private equity firm, which held a 25.64-per cent stake previously, has signed pre-IPO pacts to sell 5.66-per cent stake to RJ Corp (the parent of Pepsi bottler Varun Beverages and QSR operator Devyani International ), SBI Funds Management Ltd (the AMC of SBI Mutual Fund) and Novo Holdings (a Danish investment firm specialising in the life sciences segment).
Temasek, an existing shareholder, which holds over 18 per cent, will continue, while Dr Trehan will retain his 35-per cent stake.
Expansion plans
According to Kumar, Medanta’s 550-bed Noida hospital is expected to be operational by FY25; while there is scope of expansion across its existing facilities in Patna (from 300-odd to around 650 beds) and Lucknow (from 500 to around 900-1,000 beds). Around ₹1.3-1.5 crore is the investment requirement for each bed that comes up.
Three of its mature assets (hospitals that are over six years old) — in Gurgaon (1,400 beds), Ranchi (200) and Indore (175) — are already profitable, while the Lucknow hospital is also profitable within one year of full operations.
In FY22, Global Health reported a turnover of ₹2,200 crore; an EBITDA of 22-23 per cent; and a profit of ₹489 crore. International revenues (from foreign patients taking treatment at Medanta), which was 11 per cent pre-Covid, currently stands at around 5.5 per cent.