North India-focused hospital chain Paras Healthcare Private Limited has picked three investment banks to manage its proposed Rs 1,000 crore initial public offering (IPO), people aware of the development told Moneycontrol.
Moneycontrol first reported on March 13 that the hospital chain had initiated a process to appoint investment banks for its IPO.
“Paras has picked ICICI Securities, Motilal Oswal and IIFL to run its IPO. Work on preparing the IPO document kicked off recently,” said one of the persons cited above.
The bulk of the proposed IPO, around Rs 800 crore, will include a secondary stake sale by existing shareholders, particularly Creador, a South and Southeast Asia-focused private equity fund, the sources said.
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Creador is likely to offload its entire holding in the IPO. A small portion of primary capital will be raised to fund expansion plans, sources added.
The company may fetch a valuation of Rs 3,500-4,000 crore or even higher, the sources said.
Creador invested Rs 275 crore in Paras in 2017 and holds close to a 25 percent stake in the company.
The hospital chain’s IPO plans follow an earlier attempt by the PE fund to sell its stake. Moneycontrol reported in May 2023 that Creador had appointed an investment bank to seek buyers for its stake in Paras.
Emails sent to Paras Healthcare, ICICI Securities, Motilal Oswal and IIFL did not elicit a response.
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North-focused hospital chain
The hospital chain started its first facility in Gurugram back in 2006. Currently, it manages a portfolio of seven multi-super-specialty hospitals under the brand name Paras Health with 1,700 beds.
Among these, two hospitals are in Haryana, two in Bihar, one in Rajasthan, one in Jharkhand, and one in Jammu & Kashmir, with plans for expansion into Uttar Pradesh.
Paras Healthcare’s consolidated operating revenue rose 17 percent to Rs 918 crore in FY23, compared to Rs 780 crore in FY22, according to a report by credit rating agency Care Ratings.
The chain derived revenue predominantly from critical therapeutic segments, including cancer care (approximately 17 percent of total gross revenue for FY23), orthopaedics and joint replacement (around 14 percent), cardiology (about 11 percent), and neurosurgery (about 9 percent), the Care Ratings report said.
These segments collectively contributed 52 percent of gross revenue during FY23 (compared to 48 percent in the previous year), with the rest coming from other segments like neurology, nephrology, gastroenterology and GI surgery, cardiac surgery, and urology.
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Hospital IPOs
In the last few months, the Indian market has seen two hospital chain IPOs.
Eastern Indian-focused GPT Healthcare raised Rs 525 crore in its new share sale in February, while Western India-focused Jupiter Life Line Hospitals raised Rs 542 crore in its September IPO.
Earlier in July, Noida-based Yatharth Hospital & Trauma Care Services Ltd raised Rs 686 crore through its IPO.
In November 2022, Naresh Trehan-led Medanta Hospital’s parent company Global Health Ltd raised Rs 2,206 crore through an IPO.
