Global Health Ltd, which operates and manages hospitals across India under the Medanta brand, has filed draft papers for an initial public offering which will see private equity investor Carlyle Group make a part-exit.
The IPO consists of a fresh issue of Rs 500 crore and an offer for sale (OFS) of up to 48.44 million shares by promoters and shareholders.
The OFS comprises up to 43.34 million shares by Carlyle Group and up to 5.1 million shares by co-founder Sunil Sachdev.
Naresh Trehan, a cardiovascular and cardiothoracic surgeon, co-founded Medanta in 2004. He has been awarded the Padma Bhushan and the Padma Shri.
Private equity investors Carlyle Group and Temasek Holdings hold 25.67% and 17%, respectively, of Global Health, while Trehan has 35% stake, co-founder Sunil Sachdeva 13.43%, RJ Corp 3.95% and Agio Image 1.97%.
Temasek is not selling shares in the IPO. Carlyle and Temasek made their investments in 2013 and 2015, respectively.
Kotak Mahindra Capital Co Ltd, Credit Suisse Securities India, Jefferies India and JM Financials are the book running lead managers to the issue.
Medanta intends to utilise Rs 375 crore of the proceeds towards repayment of borrowings. As of June 2021, Global Health had outstanding borrowings of Rs 767.58 crore on a consolidated basis.
Medanta is a private multi-specialty tertiary care provider operating in the north and east regions of India, with key specialties of cardiology and cardiac science, neurosciences, oncology, digestive and hepatobiliary sciences, orthopaedics, liver transplant, and kidney and urology.
As of March 2021, the firm provided services in over 30 medical specialties and engaged with over 1,100 doctors. Its operational hospitals have 2,176 installed beds.
Patna and Noida hospitals are expected to commence operations during fiscal 2022 and 2025 and with this the firm expects the number of total installed beds to exceed 3,500.
For fiscal year 2021, consolidated total revenue stood at Rs 1,478.2 crore against Rs 1,544.3 crore a year ago. Net profit for the period was Rs 28.8 crore versus Rs 36.3 crore last year.
In 2019, TPG and Temasek-backed Manipal Hospitals was in talks to acquire Medanta whose board had even accepted the binding offer of Rs 5,800 crore. However, the talks did not materialise.
According to Hindustan Times, in June 2020, the Enforcement Directorate had filed a money-laundering case against Medanta; Trehan; Global Health; Atul Punj of Punj Llyod; and Sunil Sachdeva and Anant Jain, officers of Haryana Shehri Vikas Pradhikaran; for alleged irregularities in the allotment of land to Medanta in 2004.
A spokesperson for Medanta said the FIR has been quashed by a court. “The Enforcement Directorate had sent us a notice based on an FIR registered at the behest of a private complainant. The FIR stands cancelled by a judgment of the District Court, Gurugram passed on 12.3.2021. While cancelling the FIR, the court found that there was neither any offence committed nor any irregularity in the land allotment.”
Note: This story has been updated with a comment from Medanta spokesperson.