KIMSHEALTH gearing up for an IPO, to give exit to PE investor True North

The hospital chain is planning to add 1,000 beds in India and GCC countries in the next three years

KIMSHEALTH, one of the leading multi-specialty hospital networks, is looking at an IPO to fund its capex and to give exit to private equity investor True North.

Dr M I Sahadulla, Chairman and Managing Director, KIMSHEALTH, the Kerala-based healthcare chain, said that the hospital chain is planning to add 1,000 beds in India and Gulf Cooperation Council (GCC) countries in the next three years, through organic and inorganic growth. The company is planning to invest around Rs 500 crore.

To support the investment plans and to give exit to True North the company is getting ready for an IPO. Size of the IPO will be based on the valuations.

"We are in the process of getting the company ready for IPO and we plan to list in the next 18-24 months. IPO size is not decided, it will be a combination of fresh issuance and offer for sale by existing investors," said Sahadulla, adding that  PE investors exit route could be through IPO or any other mode.

In India, the hospital chain has 1,630 beds and in the middle east, it has around 100 beds. The hospital chain owns 8 hospitals (5 in India including KCC & 2 in Middle East), two medical centers in India, 13 medical centers and a diagnostic laboratory in GCC.

The upcoming hospitals including one in Nagercoil, Tamilnadu, will get commissioned in the next one year. It will be a multispeciality hospital with 150 beds .

At GCC we plan to acquire two more hospitals one each at Oman and Saudi Arabia apart from a couple of more medical centers, said Sahadulla.

The hospital chain reported a revenue of Rs 662.7 crore in 2019-20 and post-Covid it expects the revenue to drop to around Rs 500 crore in 2020-21. With the commissioning of new tower KIMS East this year, the hospital chain expects to grow its revenues considerably and plans to reach Rs 1,000 crore 2023.

In GCC, the company achieved revenue of $104 million in CY20 despite the dip due to Covid-19 during the second quarter (Apr-Jun). Expected revenue for the year CY21 is $137 mn with commissioning of one more 60 bed hospital and one more medical center in Bahrain.

By CY23 the hospital chain targets consolidated revenue of around $160 million.

On occupancy, he said that in company's flagship hospital in Trivandrum which contributes about 70% to the group's topline, the occupancy was in the range of 75% to 80% pre-Covid and post-Covid, this dipped to 40% in April and has reached 60% now in Dec 2020. The rest of the units are ramping up and some have already attained pre covid occupancy.

In GCC the average occupancy of its two hospitals was in the range of 46% to 52% pre-Covid and post-Covid it dipped to about 24% in April and has reached around 38% in December 2020.