Manipal Health readies $1 bn IPO; targets $12-15 bn valuation

Valuation of India's largest hospital network is around $12-15 bn. The Issue will comprise fresh issue of shares and a small portion as OFS

Manipal Health Enterprises, India’s largest hospital network operator, is preparing to file a $1 billion initial public offering (IPO) early next year at a valuation of $12-15 billion, sources said.

 

The issue will primarily comprise a fresh issue of shares, with a small portion as an offer for sale (OFS) by existing investors. Decisions are not final. “The proceeds will be primarily used for growth and expansion of the hospital, and there would be a small portion of OFS,” said a source close to the development.

 

“Manipal Health IPO papers are likely to be filed with Sebi in January, and typically the regulator takes three to four months to approve the issue. If everything goes according to plan then the Manipal Health IPO may happen sometime mid-next year,” said the source.

 

Manipal Health did not immediately respond to Business Standard’s email for comments.

 

The company’s promoters are yet to take a call on the valuation. “It will be in the range of $12-15 billion but will be decided closer to date of issue and depending on market conditions. We would also want retail investors to make some money,” said the source.

 

The Bengaluru-based hospital group is collaborating with advisers, including Kotak Mahindra Capital Co., Axis Bank Ltd., and the Indian divisions of Goldman Sachs Group Inc., JPMorgan Chase & Co., and Jefferies Group LLC, regarding the prospective sale, according to the sources.

 

Manipal Hospitals, strongly supported by Singaporean state-owned investor Temasek Holdings Pte., is poised to become the most valuable healthcare operator in India following its planned listing. This anticipated offering highlights the surging investor enthusiasm for healthcare platforms across the country.

 

The company has rapidly expanded through strategic acquisitions, most recently concluding a deal for Sahyadri Hospitals, Maharashtra’s largest hospital chain, which it acquired from the Ontario Teachers’ Pension Plan Board. In June, private equity firm KKR committed $600 million in financing to accelerate Manipal’s future growth initiatives. The Sahyadri acquisition prompted Manipal Hospitals to pause work on its IPO earlier this year, according to Bloomberg.

 

Manipal, which is part of a larger conglomerate encompassing health care, education, and insurance, currently boasts a network of more than 10,500 operational beds.

 

If successful, Manipal will likely surpass Max Healthcare Institute, which is currently India's most valuable hospital chain with a market capitalization of approximately $12 billion. The last significant hospital IPO in the country was Dr. Agarwal’s Health Care’s $350 million offering earlier this year.

 

Manipal, which is part of a larger conglomerate encompassing healthcare, education and insurance, currently has a network of more than 10,500 operational beds.

 

If its IPO is successful, Manipal will likely surpass Max Healthcare Institute, India’s most valuable hospital chain with a market capitalisation of around $12 billion. The last significant hospital IPO in the country was Dr Agarwal’s Health Care’s $350 million offering earlier this year.