Companies
Temasek-backed Manipal Health eyes a $1 bn IPO, calls banker pitches
Summary
- The IPO will likely include a secondary offer for sale and a ‘large’ primary capital raise
Temasek-backed hospitals chain Manipal Health Enterprises Ltd has sought banker pitches for a likely $1-billion initial public offering (IPO), valuing the Ranjan Pai-founded firm at over $7.5-8 billion, according to two people aware of the development.
“The idea is to take the company public over the next 12 months and bankers have been asked to make formal pitches early next month," said one of the persons on the condition of anonymity.
The IPO will likely include a secondary offer for sale (OFS) and a “large" primary capital-raise, the person said. The company does not need capital immediately, but it will boost its war chest for a large acquisition through a primary capital raise during the IPO.
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The second person quoted above said that the existing shareholders will be diluting their stake as part of the OFS. “The company will also be looking to raise primary capital," the person added.
Some of the capital is also likely to be used to pare debt.
In an emailed response to queries, a Temasek spokesperson declined comment. Emailed queries to Manipal Group spokesperson did not elicit any response.
If the Bengaluru-based Manipal Health moves ahead with its listing plans, it would be one of the largest IPOs from the healthcare industry in India at this scale. In November last year, Aster and Blackstone-backed Quality Care said they have signed an agreement to merge. The reverse merger created the largest listed healthcare provider in India with more than 10,150 beds.
Temasek acquired 41% stake in Manipal Health in April 2023 for more than $2 billion, valuing it at nearly $4.8 billion or ₹40,000 crore. The Singapore-based investor acquired stake from Pai and others including NIIF and TPG, taking its shareholding to around 59%. Manipal Education and Medical Group Pvt. Ltd retains around 31% of the company, with TPG owning 10-11%.
Also read | Aster to Apollo, Manipal to Max, hospital chains ready for a big-bang expansion
Last year, Temasek sold up to 8% in the company to Mubadala Investment Company (Mubadala), Novo Holdings and California Public Employees’ Retirement System (CalPERS), in a bid to de-risk its holdings in the company.
Founded in 2010 by Pai, the company, also known as Manipal Hospitals, currently has a pan-India footprint of more than 30 hospitals with 9,500-plus beds and over 5,000 doctors. It has presence across cities such as Bengaluru, Mangalore, Mysore, Vijayawada, Salem, Dwarka, Palamvihar, Goa, Jaipur, Ghaziabad, Patiala, Pune and Kolkata, among others.
Company financials
In the first half of FY24, the company recorded a revenue of ₹26.2 billion, with an Ebitda of ₹7.41 billion at the consolidated level, according to India Ratings & Research.
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Manipal Hospitals consolidated revenue increased to ₹48 billion in FY23 from ₹40 billion in FY22, according to an India Ratings report from November 2023. The company’s consolidated Ebitda margin rose to 26.6% in FY23 from 23.2% in the previous year, supported by its improved case mix and increased in-patient admissions at both existing and acquired hospitals, the report said.
The overall occupancy levels of the hospital company moderated to 58% in FY23 (FY22: 64%) with net addition of 283 beds, mainly at Whitefield, Goa, Jaipur, the report said. The company reported a 14% year-on-year improvement in the average revenue per occupied bed at the consolidated level, it said.
