Medanta owner Global Health set to go public, submits IPO papers

Global Health Ltd, the company founded by famous cardiac surgeon Naresh Trehan and owner of Medanta hospitals, has filed its draft documents to launch an initial public offering (IPO).

The company aims to raise Rs 500 crore by selling new shares in the IPO. The issue also includes an offer for sale by its co-founder Sunil Sachdeva and private equity investor Carlyle.

The total size of the offer for sale is 4.84 crore shares. Carlyle alone is selling 4.33 crore of these shares. Sachdeva plans to offload 51 lakh shares, according to the draft red herring prospectus that Medanta filed with SEBI.

The company intends to use Rs 375 crore out of the fresh issue to repay its loans. It will use the remaining amount for general corporate purposes.

Medanta will join a bunch of hospital chains on the bourses. These include Apollo Hospitals, India’s biggest hospital chain, as well as Fortis Healthcare, Max Healthcare, Narayana Hrudayalaya, KIMS Hospitals and Aster DM Healthcare.

Medanta’s operations

The company was founded by Dr. Trehan, a world-renowned cardiovascular and cardiothoracic surgeon. He has been awarded the prestigious Padma Bhushan and the Padma Shri, the third- and fourth-highest civilian awards in India.

The company is one of the largest private multi-speciality tertiary care providers in the North and East regions of India. Its main specialties are cardiology and cardiac science, neurosciences, oncology, digestive and hepatobiliary sciences, orthopaedics, liver transplant, and kidney and urology.

Under the ‘Medanta’ brand, it 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. It also operates five multi-speciality clinics in Gurugram, Delhi, Darbhanga and Patna.

As of March 31, it provided healthcare services in over 30 medical specialties and engaged over 1,100 doctors. Its operational hospitals have 2,176 installed beds.

The company opened its flagship Gurugram hospital in November 2009. This hospital had 1,391 installed beds as of March 31. It started the Indore hospital in 2014, the Ranchi centre the following year and one in Lucknow in 2019.

The Patna hospital is expected to become fully operational during the current fiscal year with a target of 300 installed beds. The planned hospital in Noida is intended to start operations during 2024-25 with an installed capacity of 300 beds.

Medanta’s financials

The company generated income from healthcare services of Rs 1,436.83 crore, Rs 1,480.57 crore and Rs 1,417.84 crore, respectively, for the financial years 2018-19, 2019-20 and 2020-21.

Its earnings before interest, tax, depreciation and amortisation (EBITDA) also remained steady at Rs 217.9 crore, Rs 230.4 crore and Rs 222.85 crore, respectively, for 2018-19, 2019-20 and 2020-21.

Medanta said effects of a weaker economy on hospitals and restrictions imposed due to the coronavirus pandemic led to lower patient volumes, deferred surgeries, decline in elective surgeries and higher operational costs.

However, the company took various measures to minimise the impact of Covid-19 on its financial condition. This ensured that it did not experience a significant decline in its financial performance in 2020-21.

Moreover, its income from healthcare services increased from Rs 366.4 crore in the three months ended March 31, 2020 to Rs 467.35 crore in the three months ended March 31, 2021.

In addition, its EBITDA increased from Rs 40.57 crore in the three months ended March 31, 2020 to Rs 118.26 crore in the three months ended March 31, 2021.