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New York-based private equity firm General Atlantic aims to pare its stake in Krishna Institute of Medical Sciences Ltd (KIMS) through an initial public offering (IPO), said three people aware of the development on condition of anonymity.

The hospital chain aims to raise 700-800 crore through the IPO, which includes the stake sale by General Atlantic and a fresh issue of shares to raise growth capital, said one of the three people cited above. General Atlantic had invested $130 million in 2018 in KIMS.

“KIMS has recently shortlisted three investment banks to start work on the IPO. The draft red herring prospectus is likely to be filed next quarter," said the second person cited above.

Emailed queries to KIMS did not elicit a response. General Atlantic chose not to comment.

Founded in 2004 by Dr Bhaskar Rao, a renowned cardiothoracic surgeon, KIMS is a major multidisciplinary integrated private healthcare services provider in southern India. It runs a chain of multispecialty hospitals with focus on tertiary and advanced tertiary healthcare.

The hospital chain operates in Andhra Pradesh and Telangana through a network of nine hospitals comprising more than 3,000 beds across Secunderabad, Kondapur, Nellore, Rajamundry, Srikakulam, Ongole, Visakhapatnam, Anantapur and Kurnool, according to the company’s website. The flagship hospital at Secunderabad is one of the largest private hospitals in India at a single location with a capacity of 1,000 beds.

As on 31 March, the promoter and promoter group held 44.59% of KIMS. General Atlantic Investments owned 42.6%, while other minority shareholders held a 12.8% stake in the company, according to a report by rating agency Icra.

This is the second time that KIMS is planning to go public. It had in 2017 filed draft IPO papers with the Securities and Exchange Board of India in 2017, when it was looking to provide an exit to its previous private equity investor ICICI Ventures. General Atlantic eventually picked up the stake owned by ICICI Ventures and the IPO plan was deferred.

“The operating income of the company grew at a compound annual growth rate of 22% during FY2015- FY2020 as the bed capacity was increased to 3,004 in FY2020 from 1,184 in FY2015 and the occupancy rate improved to 74% from 65% during the same period. The company reported a 32% year-on-year (y-o-y) growth in operating income to 1,122.6 crore in FY2020, backed by the increase in the occupancy level, a 25.7% growth in inpatient volumes, a 6.8% growth in average revenue per operating bed along with addition of a new hospital (KIMS Kurnool)," said Icra in its report dated 27 July.

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