About 25-30% stake will be offered in the IPO, where a major part will be secondary stake sale by the existing investors – Sequoia Capital and True North. Promoters are also diluting a part of their stake, said sources.
A Draft Red Herring Prospectus (DRHP) will be filed by this week.
Axis, JM Financial and ICICI Securities are the lead bankers for the IPO. Cloudnine chain of hospitals operate under the parent company -Kids Clinic India Private Limited.
True North (erstwhile India Value Fund Advisors) is the largest shareholder in Cloudnine with about 36% stake, while other investors NewQuest and Sequoia together hold about 35% stake, promoters hold about 20-25% stake while the rest is ESOPs.
True North, Sequoia spokespersons declined to comment while mail sent to Cloudnine did not elicit any responses.
Headquartered in Bengaluru, Cloudnine is spread across 16 facilities in Gurgaon, Noida, Chandigarh, Panchkula, Chennai, Mumbai and Pune. The specialties of the hospital chain include maternity care, gynaecology, paediatrics, neonatology, fertility and stem cell banking.
Founded by neonatologist Dr.R. Kishore Kumar with his team of three co-founders – Rohit M.A, M. Ramachandra and Vidya Kumar in 2006, Cloudnine Group of Hospitals is backed by True North, NewQuest and Sequoia India.
With the primary capital, the company plans to set up more units across various tier I cities – two new hospitals in Bangalore, 1 hospital each in Chennai, Delhi and Chandigarh in the next 2 years.
NewQuest entered into the company in July last year through a combination of a primary investment and acquisition of a secondary stake from existing investor Matrix Partners. This was the fourth round of fundraising for Cloudnine.
The company had raised Rs100 crore ($16 million) in its second round led by Sequoia Capital and Matrix Partners India in 2013. Matrix Partners had invested Rs45 crore in the company in 2011. Later, IVFA had invested about Rs400 crore ($60 mn) to acquire the significant minority stake in 2015.
Multi-specialty pediatric hospital chain Rainbow Children’s Medicare Ltd had filed DRHP in December to raise over Rs 2,000 crore through an initial public offering (IPO). The public issue of CDC-backed Rainbow comprises fresh issue of equity shares aggregating up to Rs 280 crore and an offer sale of up to 2.4 crore equity shares.
Another major player, Global Health Limited, which operates and manages hospitals under the Medanta brand, also filed DRHP with Sebi to raise funds through an initial share-sale. The IPO consists of a fresh issue of equity shares aggregating to Rs 500 crore, and an offer for sale of up to 4.84 crore equity shares. Investor Carlyle Group and Medanta co-founder Sunil Sachdeva will sell part stake in the proposed IPO.
