Paras Healthcare files DRHP for IPO with SEBI, seeks ₹400 crore through fresh issue | Stock Market News

Paras Healthcare Limited, the fifth-largest healthcare provider in terms of bed capacity in North India, Bihar, and Jharkhand, has filed a Draft Red Herring Prospectus (DRHP) with SEBI for an Initial Public Offering (IPO).

As of March 31, 2024, the company operates with a total of 2,135 beds, having expanded its bed capacity by 885 over the past two fiscal years. Paras Healthcare manages eight hospitals under the “Paras Health” brand, located in five states and one union territory in North India.

These locations include Gurugram and Panchkula in Haryana, Patna and Darbhanga in Bihar, Kanpur in Uttar Pradesh, Udaipur in Rajasthan, Ranchi in Jharkhand, and Srinagar in Jammu and Kashmir, according to the company’s DRHP report. 

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The Kanpur hospital has the highest bed capacity, with 435 beds. The company’s average revenue per occupied bed (ARPOB) has risen to ₹44,345.37 million in FY24.

Paras Healthcare focuses on providing specialized tertiary medical care in Tier 2 and Tier 3 cities, aiming to balance quality healthcare services with affordability. The company offers a range of clinical specialties across its hospitals, including cardiac sciences, oncology, neurosciences, gastrosciences, orthopaedics, and joint replacement.

IPO details

The public offering consists of a fresh issue of equity shares worth up to ₹400 crore and an offer for sale (OFS) of up to 14,974,010 equity shares by the “selling shareholder.” Each equity share has a face value of ₹1.

The offer for sale includes 2,928,320 equity shares from Dr. Dharminder Kumar Nagar (the “Promoter Selling Shareholder”) and up to 12,045,690 equity shares from Commelina Ltd. (the “Investor Selling Shareholder”). Together, these entities constitute the “selling shareholders.”

The company plans to use the net proceeds from the offering for the prepayment or scheduled repayment of a portion of its outstanding borrowings; investment in its subsidiaries, Paras Healthcare (Ranchi) Private Limited and Plus Medicare Hospitals Private Limited, either as debt or equity, to support the repayment or prepayment of borrowings by these subsidiaries and general corporate purposes.

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ICICI Securities Limited, IIFL Securities Limited, and Motilal Oswal Investment Advisors Limited are serving as the book-running lead managers for this issue.

Expansion Plans in Gurugram and Ludhiana

In Gurugram, the company is expanding its presence by establishing a new hospital through a long-term lease arrangement. This facility, scheduled to open in fiscal 2027, will feature 300 beds. Additionally, the company is planning its first hospital in Ludhiana, also through a long-term lease, with an expected launch in Fiscal 2028 and a capacity of up to 500 beds.

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These expansions are projected to increase the company’s bed capacity from 2,135 as of March 31, 2024, to 2,935 by March 31, 2029.

Furthermore, the company has acquired land adjacent to its current hospital in Panchkula for the construction of a new facility. This new hospital will have 250 beds and is expected to benefit from synergies with the existing hospital, including a shared pool of doctors and staff.

In addition to these expansion efforts, the company is exploring inorganic growth opportunities. The DRHP report indicates that the company may pursue mergers and acquisitions to enhance operational efficiency, consolidate its market position, and expand its expertise and capabilities.

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