JP Morgan, PineBridge to partially exit through Narayana Hrudayalaya's Rs 613 crore IPO Renowned cardiologist Devi Prasad Shetty-promoted Narayana Hrudayalaya is looking to raise Rs 613

crore via initial public offering (IPO) at a price band of Rs 245 to Rs 250. The offer will see institutional investors partially exiting multi-specialty and super-specialty hospitals

operator under the brand Narayana Health. A Raghuvanshi, vice-chairman, MD and group CEO, Narayana Hrudayalaya, said the IPO is 100% offer for sale wherein the private equity investors are

selling the existing shares. "There is no fresh money being raised by the company," said Raghuvanshi adding that both JP Morgan and PineBridge had invested in the company in 2008.

Promoters Devi Prasad Shetty and Shakuntala Shetty will also sell 20,43,608 shares each. "So JPM will dilute 6% out of its 11% stake and PineBridge will sell 4% out of 11% stake in the

company. In the case of company promoters, they will offer and 2% of their holding in the company," said V Kesavan, group chief financial officer, Narayana Hrudayalaya Ltd. The post

offer shareholding, according to company officials, will be 64% by the promoters and balance 36% by others including institutional investors. UK-based development finance institution CDC

Group Plc had, in January 2015, invested $48 million, or Rs 300 crore. According to Narayana Health officials, CDC is not selling any shares in the public offer. Approximately 50% of the

entire offer will be to qualified institutional buyers, 15% to non-institutional bidders and 35% to retail investors. The offer constitutes 12% of the post issue share capital. The shares

would be listed on the NSE and the BSE. The minimum bid size is 60 shares and multiples of 60 shares thereafter. The Book Running Lead Managers to the issue are Axis Capital, IDFC Securities

and Jefferies India. Devi Prasad Shetty, chairman, Narayana Hrudayalaya, said the company has built a business model around affordable healthcare because charity is not scalable and

sustainable while business solutions certainly are. "As a group, from the very beginning, we wanted to concentrate on high value tertiary care, treatments like heart surgery, brain

operation, complex cancer surgeries, joint replacements, organ transplants etc. These are our area of interest. For all this to happen, we need volumes to be able to reduce the cost of

healthcare," said Shetty, adding though the brand is positioned as a hospital for the common man people belonging to high income group also using the services mainly for the positive

results. Established in the year 2000, the company has a network of 23 hospitals, eight heart centres and 24 primary care facilities across 31 cities, towns and villages in Karnataka and

eastern India, besides an emerging presence in central and western India. On the company's capital expenditure plans in the coming years, Raghuvanshi said, that over the next 12 to 24

months, Narayana Hrudayalaya will be investing Rs 100 crore towards opening four new projects in the country. "We have partnered private firms and trusts for setting up the new

hospitals in Vaishnodevi, Lucknow, Bhubhaneshwar and Mumbai. This apart we are continuously evaluating our facilities, adding newer modalities of treatments, etc in our existing facilities.

For that we purpose we require about Rs 100 crore annually. "All the capex will be managed through internal accruals and huge capacity of beds at the moment. We have enough capacity to

fund growth and hence do not see a requirement for raising any additional money in the future," he said. The company over the last 3-4 years has incurred a capex of around Rs 550 crore

and currently has a net debt of Rs 200 crore while its networth is in excess of Rs 900 crore.