“We have plans to list the company and (have) started discussions with bankers regarding the same,” said Dr MI Sahadulla, chairman, KIMS, without disclosing further details.
Sahadulla and friends own a majority stake in the Rs 1,300-crore KIMS, while private equity investor True North owns a significant minority stake. True North is expected to sell 15-20 per cent in the IPO, while promoters will dilute a part of their stakes, one of the people said.
“Initially, the promoters’ plan is to consolidate the business into one holding company before launching the IPO. A parent company will be formed and hospitals across Kerala and the Middle East will be brought under it,” said the source.
Consolidating the business will take 6-9 months and the IPO is expected to be launched by middle of next year, he added. Once the restructuring is over, more bankers will be hired as part of the IPO process.
Home grown PE fund True North acquired its stake from existing investors Ascent Capital Advisors and OrbiMed Advisors Llc in March 2017, and infused primary capital to fund KIMS’ expansion plans. True North invested about $200 million for a significant minority stake in the hospitals operator.
KIMS, which was valued at $400 million during True North’s investment, is expected to be valued at $700 million at the time of IPO, the second person said.
At present, KIMS operates under two holding companies in India and the GCC.
KIMS, founded by Sahadulla in 2002, has 1,800 beds across India, mainly in the south, and the Gulf Cooperation Council (GCC) region, across 10 hospitals and 8 medical centres.
KIMS draws up plan for D-Street
The hospital chain plans to add more beds by next year, Sahadulla said. While the number of beds will go up to 2,000 in India, the GCC will have 350 beds by 2020. KIMS is also planning a new 150-bed facility in Nagercoil, TamilNadu.
Apart from Thiruvananthapuram, KIMS has hospitals in Kollam, Kottayam, Perinthalmanna and Hyderabad. In the Middle East, it has hospitals in Oman, Qatar, Bahrain, Dubai and Saudi Arabia.
Aster DM Healthcare, another hospital chain owned by Keralabased physician Dr Azad Moopen, went public in 2018 in an IPO that raised about Rs 1,000 crore at Rs 190 per share.
True North, which also invested in Aster DM in 2008 for a 10.4 per cent stake, last week sold more than 7 per cent through a block deal for $65 million. Another PE fund, Olympus Capital, owns 23 per cent stake in Aster DM.
With 21 hospitals in India and the Middle East, Aster DM has a capacity of 4,800 beds.
The Bengaluru-based Narayana Hrudayalaya raised Rs 613 core in 2015, while the Ahmedabad-based multi-speciality hospital chain Shalby raised Rs 504 crore in 2017.
