Fortis to offload 25% stake through IPO

Fortis Healthcare, the healthcare company owned by the promoter family of Ranbaxy Laboratories, has decided to raise funds through an initial public offer. The company has filed the draft prospectus on September 29.

Slated to become the second healthcare company after Apollo Hospitals to go public, Fortis will offload up to 25 per cent equity through the IPO. The rest will remain with the promoter family.

The company is offering 56,666,633 equity shares of Rs 10 face value each at a premium to be decided through 100 per cent bookbuilding.

"We were waiting for Fortis to achieve a critical mass and brand presence in the market before we went public. Through the IPO, we will be financing our expansion and refinancing debt that we had acquired for the Escorts acquisition," said Shivinder M Singh, group managing director, Fortis Healthcare.

He declined to say how much money the company hoped to raise through the IPO.

Fortis has 12 hospitals in the north and 15 satellite and heard centres across the country. It has added six facilities in the financial year 2005-06 and another two -- in Vasant Kunj, Delhi and Srinagar -- since April this year.

A part of the proceeds raised through the IPO will be used to restructure the company's Rs 300 crore (Rs 3 billion) debt, Singh said.

The company's acquisition of Delhi's Escorts Heart Institute and Research Centre, for Rs 650 crore (Rs 6.5 billion), was financed through debt. While a part of it had been written off in the last financial year, the rest would be refinanced through this route, added Singh.

Of the net offer to the public, at least 60 per cent would be allocated to qualified institutional buyers proportionately, 5 per cent will be available to mutual funds.

Non-institutional investors would be allotted up to 10 per cent of the offering, while retail investors would be issued not less than 30 per cent, it said. The healthcare company proposes to allot 5 lakh equity shares to eligible employees of the company in the firm allotment portion.

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