Axis Capital, ICICI Securities Ltd, Edelweiss, to manage KIMS Hospitals IPO, which will provide an exit to investor ICICI Venture
Mumbai: Hyderabad-based super-specialty hospital chain Krishna Institute of Medical Sciences Ltd (KIMS Hospitals) has hired three investment banks as it plans to go public, giving its investor ICICI Venture an exit route, three people aware of the development said.
The hospital chain has hired Axis Capital, ICICI Securities Ltd and Edelweiss Financial Services Ltd to manage the initial public offering (IPO), said one of the three persons cited above, requesting anonymity, as he is not authorized to speak to the media.
In May, Mint had reported that the company had initiated discussions with investment banks for an IPO.
The IPO, which could see the firm raise up to Rs600 crore, has been in the works for the past few months, he said, adding the company plans to file its draft IPO documents by the end of 2016.
ICICI Venture held a 28% stake in KIMS as of 31 March 2015. The private equity fund had picked up the stake in 2014 by investing around Rs220 crore.
Emails sent to Axis Capital, ICICI Securities and Edelweiss went unanswered.
Started in 1996, KIMS today has almost 1,800 beds across five super-specialty hospitals in Telangana and Andhra Pradesh. The five hospitals are located in the cities of Hyderabad, Nellore, Kondapur, Rajahmundry and Srikakulam.
Private equity firm ICICI Venture, an investor in KIMS Hospitals, will look at selling a part of its stake in the company through the public offer, said the second person cited above, also requesting anonymity.
According to KIMS’s filings with the registrar of companies, its revenue grew to Rs409.6 crore in fiscal 2015, from Rs353.6 crore the previous year. The hospital chain reported a profit of Rs11.4 crore in 2014-15, compared with Rs6.8 crore the previous year.
The share sale plans come at a time when the public market investors have shown a keen interest in the public issues of healthcare services firms.
Since December, four healthcare services firms have tapped the primary markets to fund their expansion plans and provide an exit to their private equity investors. Collectively, these firms—Dr Lal Pathlabs Ltd, Narayana Hrudayalaya Ltd, HealthCare Global Enterprises Ltd and Thyrocare Technologies Ltd—have raised almost Rs2,375 crore.
While Healthcare Global fell 20% on listing day, the other three IPOs witnessed strong gains. Other healthcare services firms Aster DM Healthcare and New Delhi-based Centre for Sight, too, have announced plans to go public.
Last year, 21 firms raised Rs13,614 crore through IPOs while so far this year, 17 firms raised Rs11,936.5 crore from their initial share sales, data from primary market tracker Prime Database shows.