North India-focused healthcare services company Paras Hospitals is preparing to file its draft papers for an initial public offering (IPO) with the markets regulator (SEBI). The hospital chain aims to raise fresh capital for expansion while facilitating an exit for its private equity investor, Creador, which has held its investment for eight years, according to a report by moneycontrol.
Sources indicate that Paras Hospitals is finalizing its draft red herring prospectus (DRHP) and expects to file it with SEBI within the next two to three weeks. The IPO aims to raise approximately Rs 300 crore to Rs 400 crore in fresh capital, earmarked for capital expenditure and debt repayment, as the company had a net debt of around Rs 400 crore as of March 31.
Paras Hospitals has recently inaugurated a new hospital in Kanpur and plans to open two more hospitals in Gurugram and Ludhiana. The company sees significant growth opportunities in tier 2 and 3 cities across Uttar Pradesh and other states with substantial population densities but inadequate healthcare infrastructure.
Creador, which invested Rs 275 crore in Paras in 2017, currently holds close to a 25% stake in the company. The IPO plans come after earlier efforts by Creador to divest its stake, with reports in May 2023 indicating its appointment of an investment bank for the stake sale.
Paras Healthcare operates seven multi-super-specialty hospitals across North India, managing over 2,000 beds. Its consolidated operating revenue for FY23 grew 17% to Rs 918 crore, with significant contributions from critical therapeutic areas such as cancer care, orthopaedics, cardiology, and neurosurgery.
