Healthcare has become a major private equity play and with a few select large players in the industry like Fortis, the investor line is long.
NDTV has learnt that none other than private equity (PE) major Temasek Holdings is the front runner for a stake in the company. No wonder the stock is at its all time high and the key trigger could be Temasek buying into the company.
Temasek is in talks with Fortis to pick up a 10 per cent stake. The deal value is not yet known but going by the current market price it is likely to be at least Rs 250 crore.
The Fortis management is tightlipped about such a development but admits that it is open to partnerships to grow.
“The money raised will be utilised not just to fund Fortis' expansion plans but also to help acquire hospitals in South and West India,” said Shivinder Mohan Singh, CEO & MD, Fortis Healthcare.
New hospitals
Fortis is planning to add 27 hospitals from its current portfolio of 13 and is focussing on south and west to expand footprints via acquisitions. The company also plans to invest Rs 675 crore in the next 3 years.
Fortis had raised PE investment before from Trinity Capital, VASCO, Metdist Group and from George Soros mostly as pre IPO placements.
But going forward, it may widen its PE play even further. Sources say Fortis is along side talking to other funds to raise money via the REIT model to improve its margins and bring down the land costs.
But analysts are cautious on healthcare due to large capital outgo and even longer gestation periods but now with PEs like Temasek bending a helping hand Fortis' margins are likely to go up over 15 per cent in the coming fiscal.
Source: NDTV Profit