Hospital chain and private healthcare services firm Aster DM Healthcare Ltd on Wednesday refiled the draft red herring prospectus with the Securities and Exchange Board of India for a public listing.
The offer comprises an issue of fresh shares worth Rs 775 crore besides an offer for sale of 11.67 million shares by promoter Union Investments Pvt. Ltd and 4.6 million shares by private equity backer Olympus Capital Asia Investments Pvt. Ltd.
Aster DM, which had earlier filed its DRHP for a $300 million IPO and also received final observations from the market regulator in November last year, decided to postpone its public offering due to expectations of lower valuations.
The company was earlier looking to mop up Rs 609-812 crore via a fresh issue of shares, VCCircle had reported.
The company has reduced its secondary offering to a total of 16.34 million shares compared with a proposed sale of 36.07 million shares. Another private equity backer, home-grown True North (Managers)—which was previously known as
India Value Fund Advisors (IVFA)—will not be selling shares through the IPO, as proposed earlier.
Aster DM will join a clutch of pharmaceutical and healthcare companies that recently struck successful listing on the bourses.
These include Biocon Ltd’s contract research services arm Syngene International Ltd that went public in July 2015. Alkem Laboratories Ltd, India’s fifth-largest drugmaker as per domestic sales, tapped primary markets in December 2015 with a Rs 1,350-crore IPO followed by Warburg Pincus-backed Laurus Labs in November 2016.
The most recent pharmaceutical company to go public was Eris Lifesciences with a Rs 1,741 crore IPO in June this year.
A clutch of companies in the broader healthcare sector has also gone public in the past 18 months. These include diagnostics companies Dr Lal PathLabs Ltd and Thyrocare Technologies Ltd, and hospital chains Narayana Hrudayalaya Ltd and Healthcare Global Enterprises Ltd.
Here’s a snapshot of Aster DM’s revised IPO.
Size
The company will raise Rs 775 crore via a fresh issue of shares besides an offer for sale of 16.34 million shares by the promoter and a private equity backer.
Bankers
Kotak Mahindra Capital, Axis Capital, Goldman Sachs, ICICI Securities, JM Financial and Yes Securities are financial advisers to the issue.
Objects of the issue
The firm plans to use the money to purchase medical equipment (Rs 110.31 crore as compared with Rs 255 crore earlier) and for repayment of debt (557.31 crore against Rs 354 crore proposed earlier).
Company
It started the business in 1987 as a single-doctor clinic in Dubai by its doctor-founder Azad Moopen. The company was incorporated in 2008 and all operations were consolidated under Aster DM Healthcare.
Aster DM Healthcare is one of the largest private healthcare service providers in Asia with operations in countries, including India, the UAE, Oman, Saudi Arabia, Qatar, Kuwait, Bahrain, Jordan and the Philippines.
It had a diversified portfolio of healthcare facilities, consisting of seven hospitals, 89 clinics and 202 retail pharmacies in the GCC states, 11 multi-specialty hospitals and six clinics in India, and one clinic in the Philippines as of 31 March 2017.
It had 316 operating facilities, including 18 hospitals with a total of 4,651 beds as on 31 March 2017. The company recently acquired a 29.97% stake in Dr Ramesh Hospitals that owns and operates three hospitals in Andhra Pradesh.
Its hospitals in India are located in Kochi, Kolhapur, Kozhikode, Kottakkal, Bengaluru and Hyderabad and are operated under the ‘Aster’, ‘MIMS’ or ‘Prime’ brands. Its clinics in India are located at Kozhikode and Bengaluru.
Financials
The company reported consolidated net profit of Rs 266.47 crore for financial year 2016-17 on revenue (from operations) of Rs 5,931.28 crore.
Its revenue grew almost four times from Rs 1,181.42 crore in financial year 2011-12 to Rs 5,249.89 crore in financial year 2015-16.
In the same period, the growth in net profit slowed from Rs 52.3 crore to Rs 8.211 crore.
Investors
In 2012, Olympus Capital invested $100 million through a mix of a primary share purchase and a secondary transaction which saw existing investor IVFA part exit. IVFA invested over $50 million in two rounds in the company in 2008 and 2011.