Eminent cardiologist Dr Naresh Trehan-promoted Global Health Limited, which operates and manages hospitals under the ‘Medanta’ brand, is gearing up for a post-Diwali Dalal Street debut in an IPO which would value the firm at around Rs 8,800 crore, multiple industry sources with knowledge of the matter told Moneycontrol.
The Gurugram-headquartered multi-speciality hospital chain counts top private equity firm Carlyle and Singapore’s Temasek as its investors.
“The UDRHP (updated draft red herring prospectus) of Global Health has been filed with Sebi and the plan is to launch the initial public offer post-Diwali, i.e October 24,” said one of the persons cited above. A second person confirmed the same.
A third person told Moneycontrol that the targeted IPO valuation of Global Health Ltd was close to Rs 8,800 crore and that many long-only investors, pension funds and domestic mutual funds had shown interest in the deal, including GIC, which had come on board as an anchor investor.
“The eagerly awaited Medanta IPO is finally happening. There seems to be a revival in investor interest in public issues after a long lull. With successful transactions like KKR exiting Max Healthcare, the hospital segment is back in the limelight,” a fourth person told Moneycontrol.
In August, KKR sold its balance 27.5 percent stake in Max Healthcare for more than Rs 9,000 crore, the single largest block deal ever by a private equity firm in India.
According to the DRHP (draft red herring prospectus) filed by Global Health in September 2021, the IPO, a combination of primary and secondary issue of shares, would involve a fresh issue component of Rs 500 crore with the OFS (offer for sale) component including selling shareholders Global Health co-founder Sunil Sachdeva and Carlyle. The private equity firm had picked up a significant minority stake in Global Health back in December 2013.
As per the draft papers, the offer for sale component was up to 4.84 crore equity shares, as a part of which, an affiliate of Carlyle Group would sell up to 4.33 crore equity shares and Sunil Sachdeva (jointly with Suman Sachdeva) would offload up to 51 lakh equity shares.
According to a fifth person familiar with the deal, the OFS component was likely to change now with Carlyle looking to sell more shares than originally planned. He indicated that valuation multiples have expanded in the listed healthcare/hospital segment which made private investors more comfortable and told Moneycontrol that the launch of the Medanta IPO was likely in early November.
Major hospital stocks have perked up in the last three months with the likes of Max Healthcare, Apollo Hospitals, Aster DM Healthcare, Narayana Hrudayalaya, Krishna Institute of Medical Sciences and Dr Lal Pathlab rising between 10.89 percent and 22.37 percent. Fortis Healthcare was the odd one out, up 1.58 percent during the same period.
All the five persons cited above spoke to Moneycontrol on condition of anonymity.
Moneycontrol could not elicit a response from Global Health Limited and Dr Naresh Trehan and has sent email queries and reminders. This article will be updated once we hear from the firm. Carlyle and GIC couldn’t be reached for an immediate comment.
As per the draft papers, proceeds from the fresh issue would be used for debt repayment and general corporate purposes and Dr Naresh Trehan held a 35.04 percent stake in Global Health. Carlyle held a 25.67 percent stake, Temasek held 16.98 percent and Sachdeva owned a 13.43 percent stake.
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Kotak Mahindra Capital, JM Financial, Jefferies India and Credit Suisse Securities (India) are the book-running lead managers to the IPO. S&R Associates, AZB & Partners, J Sagar Associates and Saraf & Partners are the legal advisors, the draft papers say.
A QUICK LOOK AT THE MEDANTA HOSPITAL CHAIN
Global Health Ltd, founded by Dr Naresh Trehan (a recipient of the Padma Shri and the Padma Bhushan) and Sunil Sachdeva in 2004, is one of the largest private multi-speciality tertiary care providers operating in the North and East regions of India. Its key specialities include cardiology and cardiac science, neurosciences, oncology, digestive and hepatobiliary sciences, orthopaedics, liver transplant, and kidney and urology, according to a CRISIL Report.
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According to the Global Health DRHP from September 2021, under the “Medanta” brand, the firm has a network of four hospitals currently in operation (Gurugram, Indore, Ranchi and Lucknow), a hospital which is under construction with an operational outpatient facility (Patna), and one hospital (Noida) planned for development. As of March 31, 2021, the hospital chain provided healthcare services in over 30 medical specialities and engaged over 1,100 doctors, spanning an area of 3.7 million sq. feet, with operational hospitals having 2,176 installed beds.
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