Kochi-based Aster DM Healthcare Limited has filed draft red herring prospectus with capital market regulator SEBI to bring its IPO. According to the application papers filed, the upcoming IPO of the hospital chain will involve sale of 57,685,166 shares including fresh issue of 21,614,366 shares while the rest will be offered through an offer for sale (OFS). The upcoming IPO is believed to be around INR18 billion, making it the biggest public offers in recent times. Kotak Mahindra Capital Company, DSP Merrill Lynch, Goldman Sachs (India) Securities, Edelweiss Financial Services, ICICI Securities, JM Financial Institutional Securities and SBI Capital Markets are book running lead managers (BRLMs) to Aster DM IPO and Link Intime India Private Limited is the registrar to the issue.
Aster DM Healthcare is also considering a pre IPO placement of up to 9.6 million shares. If it goes ahead with the pre-IPO placement, these shares will be accordingly reduced from the public offer. Union Investments Private Limited (UIPL), Olympus Capital Asia Investments Limited and IVF Trustee Company Private Limited plan to sell their shares through the OFS route.
Use of funds
The company plans to raise nearly INR7.5 billion by issuing new shares and these funds are expected to be used for purchase of medical equipment, pre-payment of debt and general corporate purposes. In its prospectus, the company said it plans to use INR2.55 billion for purchase of medical equipment while INR3.53 billion have been allocated for pre-payment of debt.
Established by Azad Moopen, Aster DM Healthcare operates a portfolio of healthcare facilities, consisting of 6 hospitals, 83 clinics and 180 retail pharmacies in the GCC (Gulf Cooperation Council) states, 7 multi-specialty hospitals and 3 clinics in India, and one clinic in the Philippines. The India operations of the company include hospitals in Kochi, Kolhapur, Kozhikode, Kottakkal, Bengaluru and Hyderabad under any of the Aster, MIMS or Prime brands.
Hospitals tap IPO market
Hospital chains are keen to raise money by issuing equity shares as the route also helps in offering an exit to existing investors. Earlier this year, cancer-care specialist chain Healthcare Global (HCG) raised INR6.5 billion through its IPO. However, shares have continued to trade lower than the IPO price of INR218 per share.
Prior to HCG, Devi Shetty-promoted Narayana Hrudayalaya mobilized INR6.13 billion last year. The IPO of cardiac-care hospital chain did not raise any funds for the company as all the shares were offered by old investors.