Fortis Healthcare Limited (Fortis)-sponsored Religare Health Trust, which houses the hospital services business of the healthcare firm, has raised S$510.7 million ($419 million) by listing its units on the Singapore Exchange. This marks the largest IPO of a business trust sponsored by an Indian company in Singapore and the second largest primary listing in Singapore this year.
Following the listing, Fortis, through its wholly owned overseas subsidiary, will continue to hold 28 per cent stake in Religare Healthcare Trust.
Malvinder Singh, executive chairman, Fortis Healthcare Limited, said, “The increasing demand supply gap in healthcare delivery requires a significant increase in investment. By pursuing this model we are focusing on our core strength of delivering superior healthcare services with an emphasis on specialisation and widening the access to quality medical care.”
Fortis Healthcare had announced last May that it is spinning off part of its healthcare services business into a separate unit, which would be listed in Singapore and would open up possibilities for separate fundraising plans for the business.
With this move, the clinical establishment division has been taken out of the parent company, which retains the medical services division comprising in-patients departments, intensive care units, operation theatres and emergency services business. Religare Health Trust’s mandate is to principally invest in medical and healthcare assets and services in Asia, Australasia and emerging markets.
According to Singh, “We see tremendous opportunity in the sector and the creation of this asset light model gives us the ability to consolidate our business and access funds to sustain and accelerate growth.”
Fortis as a group has accumulated debt of over $1 billion and the firm has been looking to deleverage its balance sheet through the fund raised at Singapore. Part of this debt got piled up due to the recent moves by the group. Earlier, in a flip-flop in management strategy, billionaire brothers Malvinder & Shivinder Singh sold their privately held overseas healthcare assets to the public-listed firm in a deal worth $665 million.
Fortis Healthcare acquired Fortis Healthcare International Pte, consolidating the global healthcare business under a single roof. This essentially meant that the Singh brothers part-funded their own public-listed firm to buy a company owned by them (more on that here). Early last year, the promoters also sold their entire holding of 74.59 per cent in IPO-bound diagnostics chain SRL to Fortis Healthcare for Rs 803 crore.
Units of Religare Health Trust, was trading at $0.815 or around 9.4 per cent discount to the IPO price around the close of trading on debut on Friday.
CIMB, DBS, Nomura, Religare Capitals and Standard Chartered were the joint book-runners for the IPO with Citigroup as the joint lead manager.
Fortis Healthcare shares were trading at Rs 104.1 a piece up marginally in mid-day trades on the BSE in a weak Mumbai market on Friday.
(Edited by Prem Udayabhanu)