The Ranbaxy group-promoted Fortis Healthcare will be entering the capital market soon to raise close to Rs 730 crore (Rs 7.3 billion) by issuing 56,666,633 equity shares.
A major portion of the money raised, close to Rs 560 crore (Rs 5.6 billion), will be used to retire debts incurred during the acquisition of the Escorts Heart Institute and Research Centre.
Another Rs 100 crore (Rs 1 billion) will be used for development of greenfield projects in Gurgaon and Shalimar Bagh in West Delhi and another hospital in Jaipur that was part of the Escorts acquisition. The balance will once again be used in retiring debt elsewhere, informed Daljit Singh, chief executive officer, Fortis.
Fortis had filed its Draft Red Herring Prospectus with the Securities and Exchange Board of India on September 29, 2006.
The company has proposed to offer equity shares of Rs 10 each for cash at a premium that will be decided through a 100 per cent book-building process.
The company expects to be listed on both the Bombay and National Stock Exchanges.
Fortis proposes to allot 5,00,000 equity shares to eligible employees of the company in the firm allotment portion. Of the net offer to the public, 60 per cent is expected to be allocated to institutional buyers, 10 per cent to non-institutional buyers and the remaining to retail investors on a proportionate basis.
Lead managers for the book running of the issue are J M Morgan Stanley Private Limited, Citigroup Global Markets India Private Limited and Kotak Mahindra Capital Company Limited.
The number of beds at the 12 Fortis hospitals currently stand at 1,600 operational and 1,900 in all. This is expected to be enhanced by almost another 800 with the addition of the hospitals in Shalimar Bagh and Jaipur. While the hospital in Jaipur is supposed to become operational by the beginning of the next fiscal, the Shalimar Bagh hub should be ready by 2008, informed Singh.Singh refused to comment on the future plans of the group and the rumoured acquisition of Guru Nanak Hospital and Research Centre in Mumbai.