BANGALORE/MUMBAI: After shelving its IPO plan, Wockhardt Hospitals has turned to private equity (PE) majors for raising up to $150 million.
Sources said the company has held early-stage talks with several funds, with the names of AIG, 3i, Actis and Carlyle doing the rounds.
It is reliably learnt that Wockhardt is seeking a valuation closer to the lower price band of the dropped IPO, which is around Rs 225 per share. But the funds are expected to drive a hard bargain with some of them already indicating a discount pricing in the initial discussions, sources added.
Depending on the valuation, the hospital chain plans to raise anywhere between $100 and $150 million through placement, sources added.
Alternatively, the company is also exploring the option of debt while hoping to resurrect the IPO later. The promoters may not like to dilute twice, that too if the valuation is not matching their expectations, said a banking source.
When contacted, Wockhardt Hospitals chairman Habil Khorakiwala said: We are looking at raising funds through several routes, with PE being one of the options. While some of the funds confirmed looking at the proposal, others like 3i said it was not in talks.
It is learnt that the company may be holding talks with four to five funds currently. Wockhardt was planning to raise between Rs 688 crore and Rs 762 crore through IPO within a price band of Rs 280-310 per share, but lowered the price band to Rs 225-260 on the eve of the public offering.
It intended offering over 2.5 crore shares of Rs 10 face value representing 24% of the post-issue equity capital before the IPO fell through in volatile market conditions.
The company is looking at raising funds for hospital network expansion through both greenfield and brownfield projects, including a possible foray into medial tourism. The private equity industry has been actively scouting for investment opportunities in the healthcare service space.
Funds like AIG, JP Morgan and Actis have already cut deals in the healthcare services space, while 3i has significant presence in the UK healthcare market awash with private equity action.
Wockhardt currently operates 15 specialty hospitals with about 1,400 beds nationally.
Sources said the company has held early-stage talks with several funds, with the names of AIG, 3i, Actis and Carlyle doing the rounds.
It is reliably learnt that Wockhardt is seeking a valuation closer to the lower price band of the dropped IPO, which is around Rs 225 per share. But the funds are expected to drive a hard bargain with some of them already indicating a discount pricing in the initial discussions, sources added.
Depending on the valuation, the hospital chain plans to raise anywhere between $100 and $150 million through placement, sources added.
Alternatively, the company is also exploring the option of debt while hoping to resurrect the IPO later. The promoters may not like to dilute twice, that too if the valuation is not matching their expectations, said a banking source.
When contacted, Wockhardt Hospitals chairman Habil Khorakiwala said: We are looking at raising funds through several routes, with PE being one of the options. While some of the funds confirmed looking at the proposal, others like 3i said it was not in talks.
It is learnt that the company may be holding talks with four to five funds currently. Wockhardt was planning to raise between Rs 688 crore and Rs 762 crore through IPO within a price band of Rs 280-310 per share, but lowered the price band to Rs 225-260 on the eve of the public offering.
It intended offering over 2.5 crore shares of Rs 10 face value representing 24% of the post-issue equity capital before the IPO fell through in volatile market conditions.
The company is looking at raising funds for hospital network expansion through both greenfield and brownfield projects, including a possible foray into medial tourism. The private equity industry has been actively scouting for investment opportunities in the healthcare service space.
Funds like AIG, JP Morgan and Actis have already cut deals in the healthcare services space, while 3i has significant presence in the UK healthcare market awash with private equity action.
Wockhardt currently operates 15 specialty hospitals with about 1,400 beds nationally.
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