Hyderabad-based KIMS Hospitals hires bankers for IPO

Krishna Institute of Medical Sciences Ltd (KIMS Hospitals), a super-specialty hospital chain, has hired three investment bankers for its initial public offering, following a string of healthcare companies that went public in recent months.

The Hyderabad-based company aims to raise Rs 600 crore, and has hired Axis Capital, ICICI Securities Ltd and Edelweiss Financial Services Ltd to manage the IPO, a person familiar with the matter said, asking not to be identified.

The hospital chain is likely to file a draft red herring prospectus with capital markets regulator the Securities and Exchange Board of India (SEBI) by the end of this year, the person said.

The development was first reported by Mint.

Private equity firm ICICI Venture, which had invested around Rs 220 crore in the hospital chain in 2014 for a minority stake, is likely to exit during the public issue, the paper said.

KIMS was started in 1996 and has about 1,800 beds across five super-specialty hospitals in Telangana and Andhra Pradesh. The company reported net sales of Rs 393.95 crore in the fiscal year ended on 31 March 2015 against Rs 349.45 crore the previous year, according to VCCEdge, the data research platform of VCCircle. Net profit rose to Rs 7.55 crore from Rs 6.85 crore.

The company's IPO plans come on the back of successful public floats in the past year by healthcare companies including diagnostics chains Dr Lal PathLabs and Thyrocare, and hospital operator Narayana Health, which was listed earlier this year.

In June, another healthcare chain Aster DM Healthcare Ltd, which runs hospitals in India and the Middle East, filed its draft prospectic with SEBI. The company is eyeing a market capitalisation of over Rs 16,000 crore, just behind India's largest hospital chain Apollo Hospitals and more than the combined value of two other listed entities Fortis Healthcare and Narayana Health.

Visakhapatnam-based drug ingredients maker Laurus Labs became the latest healthcare company in August to file its draft prospectus.

Meanwhile, VCCircle in December reported that OrbiMed-backed hospital chain Kerala Institute of Medical Sciences would plan an IPO by 2017.

For ICICI Venture, this could serve as a booster as it goes about raising the remaining amount in its new fund. The PE firm had made a first close of the new fund at $190 million in April. It logged the first exit activity this year, selling almost all its remaining stake in staffing company TeamLease Services Ltd in August.

The PE firm has not publicly disclosed the target corpus but, as reported first by VCCircle in December, it was looking to raise $500 million. It had formally floated the India Advantage Fund Series IV over a year ago and is eyeing as much as $440 million from offshore investors.

ICICI Venture, which also has mezzanine and special situations funds, had previously raised three sector-agnostic PE funds. The last fund, launched in 2009, was raised locally. With the latest fund, it has gone back to woo foreign investors after a gap of nine years when it raised its second PE fund overseas.

It had last year clocked part or full exits from a handful of portfolio firms including Corolla Realty Ltd, Electrotherm India Ltd, Future Lifestyle Fashions Ltd, Updater Services Pvt. Ltd and Kalpataru Power Transmission Ltd, according to VCCEdge.

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