HealthCare Global's IPO to open on March 16

Offer includes fresh issue of 11.6 mn shares and expected to raise Rs 250 cr

HealthCare Global Enterprises (HCG) which runs a chain of 14 cancer care centres across country is selling 29.8 million shares in a Rs 650 crore initial public offer. The issue opens on March 16 and has a price band of Rs 205-218.

The offer includes fresh issue of 11.6 million shares and is expected to raise Rs 250 crore and an offer for sale for 18.2 million shares by promoters and private equity investors which will raise around Rs 400 crore. Private equity investors selling portion of shares include Azim Premji's Premji Invest, Temasek and Milestone Religare.

HCG is a doctor-driven enterprise led by oncologist BS Ajai Kumar and  has four other doctors on its board. Kumar  who is chairperson and chief executive officer founded the first cancer treatment centre in Bengaluru in 1989.

The company plans to use the issue proceeds to retire about Rs 170 crore bank debt, purchase of medical equipment and IT services. Currently it has 14 cancer treatment centres including a centre of excellence in Bengaluru  while 12 centres are under construction in Mumbai, Kolkata, Kochi, Kanpur, Jaipur and Delhi. The group also runs four fertility centres in Bengaluru and Delhi.

  “We have reported 25 per cent CAGR growth in revenue and we are confident of improving our revenue and margins further,” said Kumar. At present about five of its centres are generating margins of 25 per cent and Kumar said it would take 4-5 years for newer centres to generate 25 per cent margin.

In FY 15 the company reported a revenue of Rs 524 crore and a net profit of Rs 5.46 crore and for eight months ending November 2015 it reported a revenue of Rs 381 crore.

HCG is also planning a foray in Africa and has already entered into a joint venture with Commonwealth Development Corporation for developing cancer treatment centres in East Africa.