India’s leading private hospital chain, Apollo Hospitals Enterprise Ltd, on January 18 launched its qualified institutional placement (QIP) offering, aiming to raise funds as much as Rs 1,000 crore by selling shares to institutional investors, the firm said in a regulatory filing.
The hospital chain’s board approved the QIP offering by fixing a floor price of Rs 2,508.58 apiece for the share sale. The floor price has been fixed on the Securities and Exchange Board of India’s (SEBI) pricing formula for transactions, which allows firms to offer up to 5 percent discount on the floor price to prospective investors.
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With the QIP offering -- listed companies' fundraising route to raise funds by selling equity and equity-linked instruments to only institutional investors -- Apollo is eyeing inorganic growth, debt reduction and investment in building digital capabilities.
"We further wish to inform you that the Fund Raising Committee has fixed the 'Relevant Date' for the purpose of the Issue, in terms of Regulation 171 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended ("SEBI ICDR Regulations"), as January 18, 2021,
and accordingly the floor price in respect of the aforesaid Issue based on the pricing formula as prescribed under Regulation 176(1) of the SEBI ICDR Regulations is 2,508.58 per Equity Share. Pursuant to Regulation 176(1)
of the SEBI ICDR Regulations, the Company may offer a discount of not more than 5% on the floor price so calculated for the Issue," APEL said.
Reports claim that APEL may use the raised funds to acquire a 50 percent stake in a joint venture, pare down debt from its balance sheet and look forward to inorganic growth opportunities.
Apart from this, funds generated from this QIP offering may also be used for investment in technological and digital initiatives, including enabling the development of Apollo Hospitals' digital platform Apollo 24/7 into a comprehensive, integrated healthcare system, LiveMint reported.
Apollo Hospitals' bed capacity stood at 10,209 beds in 71 hospitals located across India and overseas until November 30, 2020. The premier hospital chain reported a revenue drop of 9 percent and a loss of Rs 167.4 crore in the six months ending September 30, in comparison to a profit of Rs 132.3 crore in the corresponding period of 2019.