Gujrat Based Shalby Hospitals eyes IPO, filed draft herring prospectus with SEBI

Gujrat: The Ahmedabad based Super-Specialty hospital chain, Shalby Hospitals is soon aiming towards an Initial Public Offer (IPO) for listing its shares on the stock market. It is reported that for the same a draft red herring prospectus (DRHP) was recently filed by Shalby Hospitals, with the Securities and Exchange Board of India (SEBI).

As per recent media reports,the public issue will comprise fresh sale of shares worth Rs 580 crore besides an offer for sale of 1 million shares by promoter Vikram Shah.

VC circle reports that the estimated size of total issue worth Rs 600-620 crore ($97 million) will result in dilution of 15-18% of stake on post-offer basis.The promoter currently owns 9.85% stake in Shalby, which is it assumed shall reduce to roughly 7.5% post-offer. With these numbers, the post offer value of the hospital chain would stand at roughly Rs 4100 crore.

The proceeds shall be directed towards repaying the borrowings besides upgrading the existing facilities and setting up new hospitals. The company's total debt stood at Rs 70.27 crore as on 31 December 2016, the DRHP showed. The daily adds that Shalby may focus on expansion in west and central India, including in cities such as Ranchi, Bhopal and Pune

In February 2016, Shalby had signed a joint venture with Dubai-based RAK Hospitals for joint replacement surgeries.

Shalby Hospitals was founded in 1993 and has a chain of 11 hospitals, including eight fully operational and three recently set-up hospitals. It had an aggregate bed capacity of 2,102 beds as on 31 March 2017, according to DRHP and was aiming to cross 2,500 beds by the end of 2017, according to its website. Besides other specialties, the hospitals conducts around 8,000 joint replacement surgeries in a year. half of its revenues come from hip and knee joint replacement surgeries.According to a Frost & Sullivan report the hospital chain enjoyed a 15% market share of all joint replacement surgeries conducted by private corporate hospitals in India in 2016.