Fortis Healthcare to expand hospital network, up capacity

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Fortis Healthcare to expand hospital network, up capacity

Fortis Healthcare is coming out with an IPO to expand its hospital network and to increase its capacity. Managing Director of Fortis Healthcare, Shivinder Mohan Singh says that they have three projects that they will be taking up, which they have outlined in the DRHP.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » RELATED NEWS Fortis Healthcare files DRHP with Sebi Fortis emerges a winner in Delhi's pvt healthcare sector Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty?

Fortis Healthcare is coming out with an IPO to expand its hospital network and to increase its capacity. Managing Director of Fortis Healthcare, Shivinder Mohan Singh says that they have three projects that they will be taking up, which they have outlined in the DRHP.

He adds that one is a hospital that is coming up in Jaipur, which is a 330-bed hospital. They are looking at putting up a hospital in Shalimar Bagh in West Delhi, which will be of about 550 beds and a large hospital in Gurgaon in the outskirts of Delhi.

Excerpts from CNBC-TV18's exclusive interview with Shivinder Mohan Singh:

Q: Walk us through the kind of expansion plans that you have with this company and also the debt restructuring that you are looking at doing with the proceeds of the issue?

A: Keeping with the Sebi regulations, I can only talk to you about the expansions that we have disclosed in the DRHP, Draft Red Herring Prospectus. We have three projects that we will be taking up, which we have outlined in the DRHP.

One is a hospital coming up in Jaipur; it is a 330-bed hospital. We are looking at putting up a hospital in Shalimar Bagh, which is in West Delhi, which will be of about 550 beds and a large hospital coming up in Gurgaon in the outskirts of Delhi.

Apart from that, what we have mentioned is the fact that whatever model we have adopted for North India, which is currently 12 hospitals, we would like to replicate that across the country.

As regards the debt restructuring, what is probably known is that we had picked up Escorts last year, largely from picking up debt from the market. So it was a pretty leveraged buy out of Escorts from Fortis last year.

We re-financed some of that earlier in the year and we are looking at re-financing the balance of that right now. Therefore, it is a twin objective IPO; one is for funding some portion of the growth and second is for restructuring the debt that we picked up with Escorts last year.

Q: The market buzz is really in great detail over Soros Private Equity Partner and Blue River Capital; give us more information on what are Fortis' plans? Are you looking at placements like this? The media reports seem to suggest that you would be raising about USD 50 million via this route and divesting about 10% stake in Fortis?

A: Even I read that in the news today. Basically, what we have said is that we have kept an option for pre IPO private placement before we hit the market. In the last couple of months, we have not really had time to look at that, keeping in mind the ruling schedule that one needs to keep for the DRHP.

But we have kept an option because that is what has been recommended to us by the I-bankers. We will see how it looks and we will take a call accordingly before we hit the market if at all. We have not yet taken a decision on that as of now.

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