Mumbai: After calling off its nearly Rs700 crore initial public offer (IPO), Wockhardt Hospitals Ltd is now working on a new funding plan to complete the already initiated new hospital projects.
The company, which had to withdraw the proposed IPO on Thursday due to poor investor response, may now take the private placement route, said a person close to the company who didn’t want to be identified. “The private placement could be even with the parent Wockhardt Ltd that will hold a board meeting on 20 February,” he said.
Expansion mode: Wockhardt Ltd chairman Habil F. Khorakiwala
Wockhardt had planned the IPO to fund a pan-India expansion plan involving a capital expenditure of Rs636.35 crore. Though the company had spent Rs66.88 crore on the expansion plan until December, it wanted to fund the balance requirement of Rs569.47 crore by tapping the capital markets. Wockhardt also had plans to use around Rs285 crore of the IPO proceeds to pre-pay its short-term loans.
“Since the green-field hospitals coming up at Kolkata, Mumbai and New Delhi are confirmed, and the work is already in progress, they will be completed on time. We would work out some alternative funding plans for completing these projects,” said Wockhardt spokesperson Daryl S. He declined to elaborate.
As part of its expansion plan, Wockhardt Hospitals, a health care services provider, is also adding the bed capacity at Wockhardt Heart Hospital, Mumbai, besides six other hospitals in Goa, Bhavnagar, Nasik, Bhopal, Ludhiana and Jabalpur.
With the IPO, Wockhardt had offered about Rs2.51 crore worth equity shares, which constitutes 24.06% of the post-issue share capital of the company. In January, the company raised around Rs149.33 crore by making two pre-IPO placements with Bennett, Coleman & Co. Ltd (16,12,903 equity shares at Rs310 per share) and with Citigroup Global Markets Mauritius Pvt. Ltd (33,00,000 equity shares at Rs301 per share), constituting 1.5% and 3.2% of the post-issue equity share capital, respectively.