Aster DM Healthcare To Refile IPO DRHP:
As per sources Aster DM Healthcare, which runs hospitals across India and Gulf countries is said to be refiling draft red herring prospectus (DRHP) with SEBI – as it resumes its initial public offering (IPO) plans at a reduced valuation.
Aster DM Healthcare filed its draft red herring prospectus (DRHP) for IPO in June 2016 with an intention to raise around Rs 2,000 crore, to provide an exit to existing PE investors, repay debt, and invest on expansion.
The IPO received approval from the Securities and Exchange Board of India (Sebi) in November, but Aster DM Healthcare has deferred the public issue – with its overseas business – especially the hospital business in Gulf region was impacted due to slump in the oil price and economic slowdown.
“For instance, in Saudi Arabia, where a substantial portion of our revenues are derived from patients referred and funded by the Ministry of Health, a decline in oil prices and the overall economic conditions have had a direct impact resulting in an increase in our receivables position from the Ministry of Health. In order to counter this, we may explore other business opportunities in Saudi Arabia, including increasing our share of private insurance and walk-in patients. However, there can be no assurance that we will be able to successfully secure alternate sources of revenue in Saudi Arabia, or at all,” the company had said in its June 2016 DRHP.
The Gulf region accounts almost 90 percent of company’s net revenues of Rs 3,875.8 crore in FY15.
In June last year, Aster DM Healthcare was eyeing a market capitalisation of over Rs 16,000 crore just behind India’s largest hospital chain Apollo Hospitals and more than the combined value of two other listed entities Fortis Healthcare and Narayana Hrudayalaya, but analysts said with the changed circumstances the company should be realistic on valuation expectations.
“There is no change in IPO plans,” said spokesperson of Aster DM Healthcare in an email. “(The) company continues to evaluate various fund raising options, in line with changing business environment and will tap the markets at appropriate time depending on various factors including market conditions,” the spokesperson added.
Aster DM Healthcare didn’t comment on the valuation or the timeline for the proposed IPO.
Kotak Mahindra Capital has been the merchant banker of the company.
Azad Moopen, the physician-turned entrepreneur from Kerala commenced his business in 1987 as a single doctor clinic in Dubai.
Aster DM Healthcare is one of the largest private healthcare service providers in Asia with operations in multiple countries including India, UAE, Oman, Saudi Arabia, Qatar, Kuwait, Bahrain, Jordan and the Philippines.
It has diversified portfolio of healthcare facilities, consisting of six hospitals, 83 clinics and 180 retail pharmacies in the Gulf region, seven multi-specialty hospitals and three clinics in India, and one clinic in the Philippines as of March 31, 2016. It also operates 180 standalone retail pharmacies in GCC states besides those integrated with its hospitals in India.
Further, the company acquired a 29.97% stake in Dr Ramesh Hospitals that owns and operates three hospitals in Andhra Pradesh and has the agreement to buy majority stake in it.
Its hospitals in India are located in Kochi, Kolhapur, Kozhikode, Kottakkal, Bengaluru and Hyderabad and are generally operated under the “Aster”, “MIMS” or “Prime” brands. Its clinics in India are located at Kozhikode and Bengaluru.
The company had a total employee base of 12,774 as of March 31, 2016, including 1,003 full time doctors, 4,406 nurses, 1,063 pharmacists, 1,285 paramedics and 5,017 other employees.
In 2012, Olympus Capital invested USD 100 million through a mix of primary share purchase and secondary transaction which saw existing investor IVFA part exit. IVFA invested over USD 50 million in two rounds in the company in 2008 and 2011. Both PE firms are offloading part of their stake in the offer for sale portion of the IPO.
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