India’s Paras Healthcare set for IPO filing

INDIA – Paras Healthcare, a hospital chain headquartered in Gurugram, India, is expected to file draft papers for an initial public offering (IPO) by the end of this month.

As per The Economic Times, the IPO, estimated to be between Rs10 billion (US$120 million) and Rs12 billion (US$140 million), is primarily aimed at providing an exit for private equity investor Creador.

A portion of the proceeds will also fund the expansion of the hospital network, potentially valuing Paras at Rs40 billion to Rs45 billion( US$228.57 million to US$257.14 million ).

ICICI Securities, IIFL, and Motilal Oswal have been appointed as merchant bankers for the issue.

When approached for a comment, Paras Healthcare declined to respond, the  reported  publication.

The company had previously raised Rs2.6 billion ( US$14.86 million) in equity capital from Creador in July 2017 through Compulsorily Convertible Preference Shares (CCPS).

These shares were converted into equity in September 2018, resulting in a 24.68% stake for Creador in Paras Healthcare.

According to the agreement with Creador, Paras is obliged to buy back the shares at a fair market value after a period of 63 months, which was extended by 12 months due to the Covid-19 pandemic.

It is believed that the company’s revenue surpassed Rs10 billion( US$120 million) in the last financial year.

Founded in 2006 by Dr Dharminder Nagar, Paras Healthcare operates eight multi-specialty hospitals with a total capacity of 2,100 beds across North and East India.

The company plans to expand by adding another 800 beds over the next two to four years, with new facilities in Gurugram and Ludhiana.

While the Gurugram and Udaipur hospitals are owned by the company, the others operate on an asset-light model with long-term real estate leases.

Paras Healthcare’s major medical specialties include cardiac sciences, neurosciences, orthopaedics, oncology, and gastroenterology, with the bulk of its revenue generated from the Gurugram, Patna, and Panchkula markets.

The hospital chain’s IPO plans follow an earlier attempt by Creador to sell its stake, which was reported by Moneycontrol in May 2023.

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