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MUMBAI : Global Health Ltd, which operates and manages hospitals under the Medanta brand, has filed a draft red herring prospectus with the Securities and Exchange Board of India (Sebi) to raise funds via an initial public offering (IPO).

The IPO consists of a fresh issue of 500 crore and an offer for sale of up to 48.44 million shares by the company’s promoters and shareholders —43.34 million shares by Anant Investments and up to 5.1 million shares by Sunil Sachdev.

Cardiovascular and cardiothoracic surgeon Dr Naresh Trehan founded Medanta in 2004. 

Private equity investors such as Carlyle Group through its affiliate, Anant Investments, and Temasek Holdings via its affiliate, Dunearn Investments Mauritius Pte Ltd, hold minority stakes—25.67% and 17%, respectively—in Global Health, while Trehan has a 35% stake, Medanta co-founder Sunil Sachdeva 13.43%, RJ Corp Ltd 3.95% and Agio Image Ltd 1.97%.

Kotak Mahindra Capital Co. Ltd, Credit Suisse Securities India Pvt. Ltd, Jefferies India Pvt. Ltd and JM Financials are the book running lead managers to the issue.

The firm intends to utilize 375 crore from the proceeds to repay loans by its arm Global Health Patliputra Pvt. Ltd and Medanta Holdings Pvt. Ltd by investing via debt or equity infusion. As of June, Global Health had outstanding borrowings of 767.58 crore.

Global Health is among the largest private multi-specialty tertiary care providers in North and East India, with key specialties of cardiology and cardiac science, neurosciences, oncology, digestive and hepatobiliary sciences, orthopaedics, liver transplant and urology.

It provides healthcare services in over 30 medical specialties and engages over 1,100 doctors. 

Spanning an area of 3.7 million sq. ft, its four hospitals have 2,176 installed beds. Its Patna and Noida hospitals are expected to commence operations during fiscal year 2022 and fiscal year 2025, which will take the total installed beds up to more than 3,500.

For fiscal year 2021, revenue stood at 1,478.16 crore against 1,544.27 crore a year ago. Net profit for the period was at 28.81 crore versus 36.33 crore last year. In 2019, TPG and Temasek-backed Manipal Hospitals were in talks to acquire Medanta Hospitals and its board had accepted an offer of 5,800 crore by Manipal Hospitals. However, the deal did not materialize.

According to a Hindustan Times report, in June 2020, the Enforcement Directorate filed a money-laundering case against Medanta Hospital, chairman Trehan, Global Health Pvt. Ltd, Atul Punj of Punj Llyod; and Sunil Sachdeva and Anant Jain, two officers of the Haryana Shehri Vikas Pradhikaran, for alleged irregularities in the allotment of land to the hospital in 2004. Medanta has described the allegations as “false, baseless and motivated".

The draft red herring prospectus said the FIR has been quashed by a court. “The ED had sent us a notice based on an FIR registered at the behest of a private complainant. The FIR stands cancelled by a judgement of the district court, Gurugram, passed on 12 March 2021. While cancelling the FIR, the court found there was neither any offence committed nor any irregularity in the land allotment."

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