After debuting at Rs 107 on BSE, Max Healthcare Institute stocks were trading 5% higher on Friday. The stock opened at Rs 107 per share and closed at Rs 112.35 on the Bombay Stock Exchange
Max Healthcare is the first healthcare company listed on the stock exchange in India with a private equity player (KKR) as its largest promoter having a 52 percent stake. All the leading hospital chain has a medical doctor at the helm or among its seven-member board of directors, except the Max healthcare institute. The script has been approved to be dealings in the list of ‘T’ group of securities on the combat Stock Exchange.
The occupancy improved from 28% to 68%
Chairman and Managing Director Abhay Soi believes the worst of the Covid-19 crisis may well be over and the company could be looking at a promising future.
Expressing confidence in returning to higher occupancy levels by the fourth quarter, Soi said the lockdown period had hit the company badly with occupancy levels plummeting to as low as 28 percent. “There has been a gradual uptick since then and we see occupancy levels improving to about 68 percent. Our intention is to take the occupancy levels to 80-82 percent. We believe that the worst is behind us,” he said at a media con-call after the listing of the company’s shares on the stock exchanges.
Healthcare company has the capacity to add more than 2,300 beds at lower Capex and faster time to market with no ramp-up period. the strategy of the company right now is to scale up and unlock the value of its non-captive pathology lab business.
Max Healthcare and Radiant merger created India’s second-biggest hospital chain
Radiant Life Care Private Limited (“Radiant”), a leading Indian hospital management company promoted by AbhaySoi and backed by KKR, has completed the acquisition of a 49.7% stake in Max Healthcare Institute Limited, the South Africa-based hospital operator Life Healthcare. AbhaySoi will be leading Max Healthcare as Chairman of its Board and Executive Council
As part of the transaction, Max India’s promoters will receive an advance of INR361 crore (US$52.2 million) from KKR in exchange for a 4.99% stake in the merged entity. Max India’s promoters will use the funds for deleveraging purposes.
Radiant’s stake acquisition is one of several steps that will eventually result in Mr. Soi and KKR together acquiring a controlling stake in Max Healthcare by combining the health care assets of Max Healthcare, Max India Limited (“Max India”), and Radiant to create the largest hospital network in North India.
Amalgamation scheme
The listing is the final outcome of the amalgamation of the erstwhile Max India into Max Healthcare and the demerger of the healthcare businesses of Radiant Life into Max Healthcare pursuant to the Composite Scheme of Amalgamation and Arrangement as approved by the National Company Law Tribunal. The resulting merger came into effect on June 1.
Max, Soi said, is also looking to ramp up revenues by exploring multiple options including brownfield expansion and inorganic expansion in new geographies.