Paras Healthcare Files draft papers with SEBI for an IPO

Paras Healthcare Ltd, a prominent name in the Indian healthcare sector, is making headlines with its recent filing of draft papers with the Securities and Exchange Board of India (SEBI) for an Initial Public Offering (IPO). Operating under the ‘Paras Health’ brand, this move is poised to bolster the company’s financial health and expansion plans. Here’s a detailed look at what this IPO entails and the potential impact on the healthcare landscape.

IPO Details: Fresh Issue and Offer for Sale

The proposed IPO is a combination of a fresh issue of equity shares worth up to ₹400 crore and an Offer for Sale (OFS) of up to 1.5 crore shares by the promoter and an investor shareholder. According to the Draft Red Herring Prospectus (DRHP), the breakdown of the OFS includes:

Promoter Dharminder Kumar Nagar: Offloading 29.28 lakh equity shares.

Investor Commelina Ltd: Divesting 1.2 crore shares.

Utilization of Funds

Paras Healthcare intends to use the proceeds from the fresh issue for several key purposes:

• Debt Repayment: A significant portion will be allocated to reduce the company’s debt burden.
• Investment in Subsidiaries: Funds will be directed towards subsidiaries, Paras Healthcare (Ranchi) Private Limited and Plus Medicare Hospitals Private Limited, in the form of debt or equity for the repayment of borrowings.
• General Corporate Purposes: The remaining funds will support the company’s broader corporate needs, facilitating overall growth and stability.

Expansive Hospital Network

Paras Healthcare operates eight hospitals under the ‘Paras Health’ brand, strategically located across five states and one union territory. The hospitals are situated in:

• Haryana: Gurugram and Panchkula
• Bihar: Patna and Darbhanga
• Uttar Pradesh: Kanpur
• Rajasthan: Udaipur
• Jharkhand: Ranchi
• Jammu and Kashmir: Srinagar

As of March 2024, these facilities boast an aggregate bed capacity of 2,135 beds, underscoring the company’s significant presence and capability in providing healthcare services.

Focus on Specialised Tertiary Medical Care

Paras Healthcare is dedicated to offering specialised tertiary medical care, primarily targeting Tier 2 and Tier 3 cities. This focus helps bridge the healthcare access gap in these regions. The company’s hospitals provide a range of clinical specialties, including:

• Cardiac Sciences
• Oncology
• Neuro Sciences
• Gastro Sciences
• Orthopaedics and Joint Replacement

Lead Managers

The IPO process is being managed by renowned book-running lead managers, namely:

ICICI Securities

IIFL Securities

Motilal Oswal Investment Advisors

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.