Even as India needs around 600,000 doctors, healthcare expansion in India and the GCC countries is set to receive a boost with Aster DM Healthcare Limited launching an IPO of Equity Shares aggregating Rs 7,250 million, besides Offer for Sale of 13,428,251 shares, priced at Rs 180-Rs 190 and opening on February 12 to close on February 15, 2018.
With the GCC contributing to 81% – and India 19% — of its business in its 19 hospitals, 98 clinics and 206 pharmacies in nine countries including India, GCC and Philippines, the focus is also on expanding and leveraging the existing GCC/India network while attracting medical value travelers to hospitals in India, Dr Azad Moopen, CMD, Aster DM Healthcare said here recently in describing the GCC – comprising UAE, Oman, Saudi Arabia, Qatar, Kuwait, Bahrain (besides Jordan) as a high CAPEX model with more return on investment, especially due to mandatory insurance there where the market is still at a ‘nascent’ stage and has low bed density compared to China and the USA.
Highlighting good healthcare growth opportunity in India’s lower socio-economic segment of its 1.2 billion population, he said India provided year-round business for the company whose flexible business model adapted to market conditions. “We are building 5 multispecialty (355 beds) hospitals in the GCC countries, and 5 hospitals (having 1,372 beds) in India, while having acquired 41 facilities in GCC and 8 hospitals in India. We are also seeking opportunities in new, underpenetrated markets in India through new acquisitions and strategic investments,” he said.
Describing the national budget 2018 as “visionary” in addressing the lower socio-economic level healthcare sector, he said India’s BPL population required medical schemes with affordable cost and the Government medical schemes would have a very ‘salutary’ effect on the overall cost of healthcare. “However, India’s pharmacy business also has not matured to the extent that it can be profitably run. We are looking at going into larger cities having larger hospitals as these are doing profitably well,” he said while highlighting the company’s CAPEX of U.S. 130 million for completion of its ongoing projects in the next 10 months.
Replying to questions, the Group CFO Sreenath Reddy attributed a Rs 501 crore drop in the company’s EBITDA for FY2017 to impact of provisioning in Saudi Arabia on receivables from the Ministry of Health and conscious shift towards private insurance patients there. The IPO funds would partly cover repayment of the company’s outstanding debt of Rs 2,926 crores while also expansion in the pipeline for hospitals in Bangalore, Trivandrum, Kannur and Calicut, he added.
