Manipal Health Enterprises, which is raising ₹8,000 crore through a fresh issue as part of its ₹9,200-crore initial public offering, could become net-debt free after the listing. The hospital chain plans to add 3,000 beds organically over the next three years, even as it integrates Sahyadri Hospitals and explores opportunities in Kerala, Hyderabad and the National Capital Region. In a face-to-face interview with Sohini Das, Managing Director and Chief Executive Officer Dilip Jose discusses the use of the IPO proceeds, expansion plans, acquisition turnarounds and investments in technology and artificial intelligence. Edited excerpts:
The IPO is largely a primary issue. How much of the money will come into the company, and how will it be used?
The total offer size is about ₹9,200 crore. Of this, ₹8,000 crore is the fresh issue and will come into the company. The money will be used to prepay debt and for general corporate purposes. The offer-for-sale component is relatively small, so the exit by existing investors is limited.
Why are the existing shareholders selling so little? Do they expect the business to command a higher valuation later?
Temasek sees Manipal as its healthcare platform. It earlier had a healthcare platform called Sheares, which it shut after acquiring a majority stake in Manipal. None of the current shareholders is in a hurry to exit. Temasek invests from its balance sheet and does not have a fund-return deadline. Ranjan Pai is the promoter, while TPG invested from a relatively new fund about three years ago and still has seven or eight years of fund life.
Healthcare should continue to do well, given the demand trends. That is why the OFS is minimal. It distinguishes this IPO from several others that are substantially shareholder exits. Here, most of the money is coming into the company for a specific purpose. We hope that gives investors comfort that the existing shareholders are not trying to maximise value and leave.
This is also the first IPO from the Manipal Group and the first time Temasek is coming to an IPO as a promoter. Since the shareholders are not looking to exit, the intention is to leave value on the table for incoming investors rather than price the issue solely to maximise the sellers’ returns.
Temasek’s holding will be diluted in the IPO. Will that change control, voting rights or the composition of the board?
No. Temasek’s holding will decline from 50 per cent to about 44 per cent after the IPO, while the promoter group’s combined stake will fall from nearly 70 per cent to around 62 per cent. However, the nine-member board and the existing governance structure will remain unchanged.
The board has three independent directors who are not connected with any investor, two Temasek nominees, one nominee from the Manipal Group, one from TPG and two management representatives, including the chairman and me.
What are your current debt levels, and what leverage are you targeting after the IPO?
As of March 31, 2026, we had gross borrowings of about ₹10,553 crore and around ₹2,969 crore in cash and liquid investments, implying net debt—excluding lease liabilities—of about ₹7,585 crore. With an ₹8,000-crore fresh issue, we can theoretically become net-debt zero.
We will decide the precise repayment level after the proceeds come in. We may repay the Sahyadri-related debt but retain some debt or cash on the balance sheet to pursue acquisition opportunities. Even if some debt remains, leverage will be very low and comfortable.
How much did the Sahyadri acquisition cost, and which debt do you intend to repay?
The total cost was about Rs 6,300 crore. We had already paid for 90 per cent of Sahyadri, with the remaining 10 per cent paid subsequently. The payment for the 90 per cent stake was financed through listed non-convertible debentures. It is this debt instrument that we want to redeem.
Why retain any debt or surplus cash if the issue gives you the ability to become net-debt zero?
It is useful to preserve optionality. If we have a couple of thousand crore available and an attractive hospital becomes available in a city of interest, we can close the transaction quickly without first having to raise funds. Board approval would still be required, but financing would not delay the transaction.
We have spoken before about our interest in Kerala and Hyderabad. Having funds available would allow us to pursue an opportunity in either market.
How concentrated is Manipal’s network in Bengaluru, and how are the new hospitals performing?
We have 14 hospitals in Bengaluru and have signed up another greenfield facility at Budigere, which will take the city’s network to around 3,000 beds. Close to half our hospitals are in southern India. As of March 31, 2026, Manipal operated 49 hospitals nationwide, including 19 in Karnataka, which contributed 43.85 per cent of pro forma FY26 revenue.
We opened three greenfield hospitals in Bengaluru within a year. A 250-bed greenfield facility costs around ₹380-390 crore, or ₹1.5 crore per bed, excluding land and building. Against an estimated break-even period of 16-18 months, Yelahanka achieved EBITDA break-even in its second month and Kanakapura Road in its fifth.
How many beds will you add over the next three years, and where will they come up?
We have about 13,000 beds today and line of sight on another 3,000 beds over the next three years. These are all organic additions and include Juhu in Mumbai, Raipur, Pune and Bengaluru. A large part of the incremental capacity will be outside southern India.
In Kolkata, we currently have around 1,550 beds across five hospitals. We have land at Rajarhat that came with the AMRI acquisition and is intended for a hospital. Once developed, Kolkata could have around 2,000 beds.
In Pune, we have about 1,300 beds today, including Sahyadri. The Wakad greenfield will add around 475 beds, while some Sahyadri hospitals and an existing Manipal hospital are also being expanded. Pune should therefore reach about 2,000 beds.
We are also interested in adding two hospitals in the National Capital Region, potentially through acquisition. Southern India may still account for roughly half the 16,000 beds after the current expansion, but the network is much more geographically balanced than it was five years ago. North India remains an area where we need to expand.
We have clear visibility on the existing 13,000 beds and the next 3,000. Beyond that, we cannot plan for acquisitions that may or may not become available.
How much of Manipal’s expansion over the past five years came through acquisitions, and will acquisitions continue to dominate growth?
We added about 5,548 beds across 31 hospitals through acquisitions. Organic additions were just under 1,000 beds during the same period.
We acquired heavily because scaled assets were available. Sahyadri was probably the last network of meaningful scale in the market, and we do not see the same volume of acquisition opportunities over the next five years. The next 3,000 beds in our identified pipeline are entirely organic.
What measurable synergies and turnarounds have you achieved in acquired hospitals?
Columbia Asia’s EBITDA margin improved from 30.51 per cent in FY24 to 33.78 per cent in FY26, while AMRI’s rose from 21.27 per cent to 23.79 per cent. The improvement has been driven largely by moving the hospitals from secondary care towards complex tertiary and quaternary procedures, rather than by price increases.
Sahyadri’s FY26 average revenue per occupied bed (ARPOB) was ₹40,555 per day. Its inclusion reduced Manipal’s FY26 ARPOB from ₹68,938 to ₹66,145 on a pro forma basis. Procurement synergies could add around one percentage point to Sahyadri’s margins, while the larger opportunity is to introduce oncology and other advanced clinical programmes.
In Kolkata, we have integrated the nearby AMRI and Columbia Asia hospitals under common leadership, divided clinical programmes between them and moved more doctors to full-time engagements.
Are you considering expanding outside India?
No. There is still substantial white space in India, so we do not want to expand internationally.
The network remains skewed towards tier-I cities. What role will tier-II and tier-III markets play?
We already operate in markets such as Patiala, Salem, Vijayawada and Siliguri, as well as in Assam. In Siliguri, we have two hospitals, including an oncology facility at Rangapani. We expanded that facility and installed a new linear accelerator.
The Rangapani unit has one of the highest radiation-treatment volumes in the network, at around 150 treatments a day, compared with the conventional capacity of roughly 30-40 patients for a linear accelerator. It has become a regional destination to which patients travel. Nevertheless, because several of our largest clusters are in metropolitan markets, the revenue mix will remain skewed towards tier-I cities.
How much do you spend on technology and maintenance capital expenditure?
Maintenance capital expenditure, including technology upgrades, is about ₹7.5-8 lakh per bed each year. This does not create new capacity; it covers medical equipment, robotics, AI, digital systems and improvements to the hospital environment. We have about 50 robotic systems across the network, including orthopaedic and surgical robots, and continue to add to them.
Has technology helped reduce the average length of stay?
Our average length of stay was 2.78 days in FY26, or 2.80 days on a pro forma basis, despite nearly two-thirds of gross inpatient revenue coming from complex specialties. This has declined from 2.93 days in FY24.
A shorter stay improves bed turnaround and is better for patients because they return home sooner and face a lower risk of hospital-acquired infection. Occupancy was around 64.5 per cent in FY26.
Is AI already reducing costs, or is its impact mainly on efficiency?
At this stage, the clearest impact is on efficiency rather than a quantified cost saving. One example is the nursing shift handover. It earlier took about 90 minutes for an outgoing nurse to brief the incoming nurse on all the patients in a bay.
Through our work with Google Gemini, relevant information is now consolidated on one screen. Handover time has fallen to around 17-18 minutes. The incoming nurse starts the shift with a much clearer view of each patient rather than having to read several files and piece together clinical notes.
How much hiring will the expansion require, and how are you addressing high nurse attrition?
I do not have a hiring number to give at this point. Nurse attrition, however, has declined from the low-40s in percentage terms to around 19-20 per cent, or roughly 1.5 per cent a month.
We found that employees with zero to two years of experience were leaving most frequently, so we raised entry-level salaries significantly. We also give nurses opportunities to move into administration and other functions.
Geopolitical disruption has affected medical-value travel over the past two years. How is the business performing now?
The outlook is reasonably good, but medical-value travel contributes only about 2 per cent of our revenue, compared with around 10 per cent for some parts of the hospital industry. One reason is that we are not deeply entrenched in Delhi, which is India’s largest market for international patients.
Bangladesh is gradually reopening. Volumes have not returned to the peak seen around two years ago, but they are improving from the period when the market had almost dried up.
The West Asia crisis is a constraint because Qatar and Dubai are important aviation hubs for patients travelling from Africa. Connectivity has fallen and airfares have risen sharply. That may have a lagged impact, and we need to see how the situation develops. Since international patients account for only about 2 per cent of our top line, however, the overall effect on Manipal is not very large.
Do you expect further consolidation, including among large hospital chains and private-equity-backed platforms?
Sahyadri was the last immediately available hospital asset of significant scale, which is why we pursued it. There do not appear to be many comparable opportunities in the near term.
Further consolidation could occur if some private-equity-backed hospital platforms come to market later. Investors such as KKR and Blackstone have been building healthcare platforms, just as Temasek built Manipal as its platform. Whether these eventually become consolidation opportunities is difficult to predict. For now, the possibilities are limited.
 "We can theoretically become net-debt zero after IPO: Manipal Health's Jose")
