We can theoretically become net-debt zero after IPO: Manipal Health's Jose

MD & CEO Dilip Jose says the hospital chain will use the ₹8,000-crore fresh issue largely to repay debt, while pursuing organic expansion and selective acquisitions in key markets

Manipal Health Enterprises, which is raising ₹8,000 crore through a fresh issue as part of its ₹9,200 crore initial public offering (IPO), could become net-debt-free after listing. In an interview in Mumbai with Sohini Das, Managing Director and Chief Executive Officer (MD & CEO) Dilip Jose discusses the IPO proceeds, expansion, acquisition turnarounds, and technology investments. Edited excerpts: 

The IPO is largely a primary issue. How much money will come into the company, and how will it be used? 

Of the ₹9,200 crore offer, ₹8,000 crore is a fresh issue that will come into the company. It will be used to prepay debt and for general corporate purposes. The offer-for-sale (OFS) component is relatively small, limiting the exit by existing investors. 

Why are the existing shareholders selling so little? Do they expect a higher valuation later? 

Temasek sees Manipal as its healthcare platform and, as a balance-sheet investor, has no fund-return deadline. TPG has seven or eight years of fund life remaining, while Ranjan Pai is the promoter. None of the principal shareholders is in a hurry to exit. The limited OFS distinguishes this IPO from largely exit-driven offerings, with most proceeds going to the company. It also allows us to leave value on the table for incoming investors. 

Temasek’s holding will be diluted. Will that change control, voting rights or the board’s composition? 

No. Temasek’s holding will decline from 50 per cent (within the promoter group) to about 44 per cent, while the promoter group’s combined stake will fall from nearly 70 per cent to around 62 per cent. The nine-member board and governance structure will remain unchanged. The board has three independent directors, two Temasek nominees, one nominee each from the Manipal group and TPG, and two management representatives — the chairman and me. 

What are your current debt levels, and what leverage are you targeting? 

As of March 31, 2026, we had gross borrowings of about ₹10,553 crore and ₹2,969 crore in cash and liquid investments, implying net debt — excluding lease liabilities — of about ₹7,585 crore. With a ₹8,000 crore fresh issue, we can theoretically become net debt zero. 

We will determine the repayment level after receiving the proceeds. We may repay the Sahyadri-related debt but retain some debt or cash to pursue acquisitions. Even if some debt remains, leverage will be very low. We have spoken about our interest in Kerala and Hyderabad. 

How many beds will you add over the next three years, and where? 

We have about 13,000 beds and line of sight on another 3,000 over three years. These are all organic additions, including Juhu in Mumbai, Raipur, Pune and Bengaluru. Much of the incremental capacity will be outside southern India. In Kolkata, we have around 1,550 beds across five hospitals and land at Rajarhat, acquired with AMRI, for another hospital. In Pune, we have about 1,300 beds, including Sahyadri. Pune should reach about 2,000 beds. We are also interested in adding two hospitals in the NCR, potentially through acquisitions. Southern India may still account for roughly half our 16,000 beds after this expansion, but the network is far more balanced than five years ago. North India remains an expansion priority. We have visibility on the existing 13,000 beds and the next 3,000. 

How much of Manipal’s recent expansion came through acquisitions, and will they continue to dominate growth? 

We added about 5,548 beds across 31 hospitals through acquisitions over five years, compared with just under 1,000 beds organically. We acquired heavily because scaled assets were available. Sahyadri was probably the last network of meaningful scale, and we do not expect the same volume of opportunities over the next five years. Our identified pipeline of 3,000 beds is entirely organic.

 

What measurable synergies and turnarounds have you achieved in acquired hospitals? 

Columbia Asia’s earnings before interest, taxes, depreciation, and amortisation (Ebitda) margin improved from 30.51 per cent in financial year 2023-24 (FY24) to 33.78 per cent in FY26, while AMRI’s rose from 21.27 per cent to 23.79 per cent. This was driven largely by moving the hospitals from secondary care towards complex tertiary and quaternary procedures, rather than raising prices. 

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 lies in introducing oncology and other advanced clinical programmes. 

In Kolkata, we have placed nearby AMRI and Columbia Asia hospitals under common leadership, divided clinical programmes between them, and shifted more doctors to full-time engagements. 

How concentrated is Manipal’s network in Bengaluru, and how are the new hospitals performing? 

We have 14 hospitals in Bengaluru and have signed another greenfield facility at Budigere, which will take the city’s network to around 3,000 beds. As of March 31, 2026, Manipal operated 49 hospitals, including 19 in Karnataka, which contributed 43.85 per cent to pro forma FY26 revenue. 

We opened three Bengaluru greenfield hospitals within a year. A 250-bed 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.