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Aug 11, 2017 10:11 AM IST

Aster DM Healthcare reduces IPO size in new prospectus

Aside has a sizeable presence in the middle east with 7 hospitals, 89 clinics and 202 retail pharmacies in the Gulf Cooperation Council (GCC) states . It also has 11 multi-speciality hospitals and 6 clinics in India, and one clinic in the Philippines as of 31 March.

Healthcare major Aster DM Healthcare limited has reduced the offer size of its initial public offering (IPO) by refiling its draft red herring prospectus (DRHP).

Aster runs 316 establishments focused on healthcare services, including hospitals, clinics, diagnostic centres and pharmacies, across the Middle-East, India and Far-East.

A Livemint report says the company is now looking to raise Rs 775 crore. The main reason for the company to reduce its offering size was to account for the impact of Aster DM’s main revenue source: the referral and funding of patients by Saudi Arabia’s ministry of health.

The changes in the economic conditions in Saudi Arabia and lower oil prices meant deferred payments from the ministry.

The company’s promoter and private equity investor Olympus Capital will sell their stake in the company through an offer for sale.

Aster DM and Olympus will combinedly float 16.34 million shares. This is less than half the initial offer for sale of 36 million shares proposed by Aster in the first DRHP. Earlier, Olympus Capital planned to sell 19 million shares alone.

True North, another private equity investor has decided to not part with its stake in Aster DM. Olympus Capital owns 26.18 percent stake, while True North owns around 11.54 percent.

Aster DM aims to use the capital raised to repay a portion of its debt and purchase medical equipment, the Mint report says.

Axis Capital and Yes Securities have replaced Bank of America Merrill Lynch, Edelweiss Financial Services Limited and SBI Capital Markets Limited as the primary investment bankers.

Aster reported a revenue of Rs 5,931.2 crore last fiscal, of which 16 percent was from India.
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