Tulsian's view on Fortis Healthcare, Apollo Hospitals

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Tulsian's view on Fortis Healthcare, Apollo Hospitals

SP Tulsian, sptulsian.com shares his view on Fortis Healthcare and Apollo Hospitals.

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Excerpts from Closing Bell on CNBC-TV18 Watch the full show » ALSO READ See previous views by SP Tulsian See what other Experts & Brokerages are saying about Fortis Health See messages about Fortis Health

SP Tulsian, sptulsian.com shares his view on Fortis Healthcare and Apollo Hospitals.

Tulsian told CNBC-TV18, "Fortis Healthcare (India), if you see the deal, the valuation report came at USD 690 million. Management is showing the generosity that they are taking the deal value at USD 660 million. In fact if you see the price paid by them for six properties for about USD 580 million and if you add the add ups - that amounts to some 20-21%. The management has said that that constitutes towards the administration cost, registration cost and some interest element. But I think it is the financing. The overseas arm has been partly financed by the Fortis Indian operations for sometime. So if Fortis India got the stake sale when they exited and got the money from Khazanah - at that time that fund was used for Fortis International operations. So that is not seen as a good corporate governance practice."

He further added, "Honestly I have no idea or I am not privy to those details or that information since I am not deliberated with the managements. No clarifications are coming on that. In fact unfortunately the management also has been silent. But if I just restrict myself to the value of the deal at about USD 660 million, honestly I don't think that there is any upside, any inflationary or profit element having loaded on that. But if this financing part has happened even for a brief period of maybe couple of months or maybe three-six months, definitely that will not be seen positive."

"If you see even Apollo Hospital , last week it moved because that there was some rumour that promoters are looking to exit and sell their stake and all that. Since then it has corrected by about Rs 100-120 - Apollo Hospital. But Fortis Healthcare has definitely been correcting post the announcement of deal by the promoters for acquiring the overseas or the international operations."