Fortis Healthcare Ltd, India’s largest network of hospitals, will raise Rs 2,000 crore within two quarters, which will help it decrease its financial leverage substantially. The company, which is under debt of close to Rs 4,500 crore, with a gearing of 1:1, will bring down the ratio to 0.6 times after the fund-raise.
The publicly-held company, which has been under-performing on bourses due to the high interest outflow, pared its debt by Rs 2,500 crore last month, which helped it reduce the gearing from 1.6 to 1. “During the past two years, we have been expanding our footprint across India, Southeast Asia, Australia and West Asia with a total bed count of 12,000. Going forward, we are embarking on expansion through the asset light model,” Vishal Bali, group chief executive officer of Fortis, told Business Standard.
Fortis will add another 1,200 beds in the next financial year. Religare Health Trust, a business trust owned by the promoters, will invest in the assets as and when required. The trust currently owns around 40 per cent of the assets of Fortis and there are indications that the hospital network may look to transfer more assets to the business trust, which is listed in Singapore.
Bali, however, said they had not finalised an instrument to deleverage as they are studying various options. Many Indian hospital chains are adopting the asset light model in which the real estate and infrastructure costs are offloaded to a real estate investment trust or some other trusts.
As part of its expansion plans through the asset light model, Fortis recently entered into a strategic tie-up with Dubai-based Majid Al Futtaim Healthcare, the healthcare arm of Majid Al Futtaim Ventures, to operate and manage its healthcare assets, starting with a day care specialty clinic located in Deira City Centre.
Fortis, which had reported revenues of around Rs 4,700 crore during the last financial year, derives equally from Indian and overseas operations.
While the Indian operation is primarily led by secondary and tertiary hospitals, the overseas operations is led more by primary healthcare in Hong Kong, dental clinics in Australia and New Zealand and diagnostics and imaging in Singapore.
According to Bali, Fortis in India will try to enhance its presence in the primary healthcare based on the extensive learning from its Hong Kong operations.
“We have an expansive network of hospitals in India and the primary healthcare focussing on preventive medicine and outpatient issues will be a bolt on to the main hospitals besides also looking at stand-alone neighbourhood clinics,” Bali said.