IHH Healthcare re-brands Global Hospitals under the brand Gleneagles

Nine out of 10 of its operating hospitals carry the brand Gleneagles now

IHH Healthcare Berhad is consolidating its Indian platform by rebranding Global Hospitals, in which it is a majority investor, under the brand Gleneagles. IHH is a healthcare group in which the Malaysian government's sovereign wealth fund Khazanah Nasional holds a majority stake.

The company has sold more than half its stake in Apollo Hospitals, which analysts see as a move aimed at strengthening its presence in India.

"We are further consolidating our India platform by re-branding our Global Hospitals facilities under the IHH 'Gleneagles' brand. This will drive greater brand equity," said IHH Healthcare in response to specific queries on their India plan. The company, which has a presence in Asia and Central and Eastern Europe, currently has five brands in its kitty -- Mount Elizabeth, Gleneagles, Pantai, Parkway and Acibadem.

IHH Healthcare had acquired a 73.4 per cent stake in Ravindranath GE Medical Associates Pvt Ltd, which had hospitals under the brand Global Hospitals, for Rs 1,284 crore in August 2015. The deal was effected through its indirect wholly-owned subsidiary Gleneagles Development Pvt Ltd. The hospital chain had around 1,100 operational beds in Hyderabad, Bengaluru, Chennai and Mumbai at the time it was bought over by IHH, and has since grown to around 2,000 beds. The shares in Global Hospitals are held by Parkway Pantai, fully owned by IHH Healthcare Berhad.

IHH Healthcare has 10 operating hospitals in India, including Apollo Gleneagles Hospital in Kolkata, which is a joint venture with Apollo Hospitals. With the re-branding, nine out of the 10 operating hospitals that it has in India will have the brand Gleneagles attached to them. This includes eight Global Hospitals which will be known as Gleneagles Global Hospitals. Continental Hospitals, in which the company acquired a 51 per cent stake in 2015 for Rs 282 crore, has not been re-branded so far.

Earlier this month, the company sold around 6.07 per cent of its 10.58 per cent stake in Apollo Hospitals Enterprise Ltd (AHEL) for around Rs 1,070 crore. Analysts expect the Malaysian firm to offload its remaining 4.78 per cent stake in AHEL as part of consolidating its investments in the country.

"We foresee that there is a potential for the group to divest the remaining stake of 4.78 per cent in the near future as the group consolidates and rationalises its investments in their fourth home market," an analyst from Hong Leong Investment Bank was quoted as saying.

"They (IHH) are looking at India at a much bigger play now, and with a Rs 1,800 crore valuation at present, selling the 11 per cent share in AHEL could help them to subsidise their India play," said a source close to the development on condition of anonymity.

IHH Healthcare responded, "We have nothing new to add on our 6.07 per cent equity interest divestment in Apollo Hospitals Enterprise. We are retaining our remaining 4.78 per cent stake for the moment."

The company shifted its focus to inorganic growth in India after its efforts to establish its presence through green field project hit roadblock earlier.

"We are excited that India is now our fourth home market after we successfully re-calibrated our growth strategy here, learning from our Khubchandani experience to focus on brown field products," said the company.

Almost a decade ago, IHH Healthcare made initial plans to undertake greenfield developments, including Gleneagles Khubchandani Hospital. The project, which was being developed in a joint venture, has been put on hold at present, after almost a decade of delay, according to sources. It has impaired charges of RM 132.7 million on investment into this in the fourth quarter of FY2016, according to company documents. It has later on moved on through acquisition of Global and Continental Hospitals in 2015.

IHH Healthcare currently has around 10,000 licensed beds in 52 hospitals across 10 countries. Another over 3,000 new beds are in the pipeline, as on January 2017.