Paras Healthcare, a prominent hospital chain based in Gurugram, India, is gearing up to file draft papers for an Initial Public Offering (IPO) by the end of this month, according to reports from The Economic Times. This strategic move is primarily designed to facilitate an exit for its private equity (PE) investor, Creador, while also supporting the expansion of its hospital network.
The anticipated IPO, estimated to raise between Rs 10 billion ($120 million) and Rs 12 billion ($140 million), is set to value Paras Healthcare between Rs 40 billion and Rs 45 billion. The proceeds will predominantly serve to provide an exit for Creador, which holds a significant stake in the company, with a smaller portion allocated for the development of new hospital facilities.
Leading the IPO process, Paras Healthcare has appointed ICICI Securities, IIFL, and Motilal Oswal as the merchant bankers. Despite multiple requests for comments, the company has remained tight-lipped regarding the upcoming public issue.
Paras Healthcare’s relationship with Creador began in July 2017, when it raised Rs 2.6 billion through Compulsorily Convertible Preference Shares (CCPS). These shares were converted into equity in September 2018, granting Creador a 24.68% stake in the healthcare company. Under their agreement, Paras Healthcare is obligated to buy back the shares at fair market value after a stipulated period, which was extended due to the COVID-19 pandemic. The company’s revenue reportedly exceeded Rs 10 billion in the last financial year, indicating a strong financial performance ahead of the IPO.
Established in 2006 by Dr. Dharminder Nagar, Paras Healthcare operates eight multi-specialty hospitals, providing a total of 2,100 beds across North and East India. The hospital chain is set to grow further, with plans to add 800 more beds over the next two to four years through new facilities in Gurugram and Ludhiana. Notably, while the Gurugram and Udaipur hospitals are owned by the company, the remaining facilities operate on an asset-light model, utilizing long-term real estate leases.
Paras Healthcare specializes in several major medical fields, including cardiac sciences, neurosciences, orthopaedics, oncology, and gastroenterology. The bulk of its revenue is derived from its hospitals in Gurugram, Patna, and Panchkula, which have established themselves as key markets for the company.