Manipal Health, Financed by Temasek, Plans a $1 billion IPO and Requests Banker Presentations

Nitin Konde, Varun Bhardwaj

Jan 18, 2025 — 2 min read

Manipal Health Prepares $1 Billion IPO Backed by Temasek

According to a media report, Temasek-backed hospital network Manipal Health Enterprises Ltd. has requested banker presentations for an anticipated $1 billion IPO, valuing the company established by Ranjan Pai at more than $7.5-8 billion. The report further stated that the bankers have been requested to make official proposals early next month with the goal of taking the company public over the course of the next 12 months.

A secondary offer for sale (OFS) and a "large" primary capital raise will probably be part of the IPO. Although the company does not require funding right now, a main capital offering during the IPO will increase its financial cap for a significant purchase. Current shareholders will be reducing their ownership position in the OFS. The company will also be looking to raise primary capital. It's also probable that some of the funds will be utilised to reduce debt.

One of the Largest IPOs of Healthcare Sector

Manipal Health, situated in Bengaluru, would rank among the biggest initial public offerings (IPOs) from the Indian healthcare sector on this scale if it proceeds with its listing plans. Aster and Blackstone-backed Quality Care announced their merger deal in November of last year. With over 10,150 beds, the reverse merger produced India's largest publicly traded healthcare provider.

In April 2023, Temasek paid over $2 billion to acquire a 41% share in Manipal Health, valuing the company at around $4.8 billion, or INR 40,000 crore. The Singaporean investor increased its ownership to almost 59% after purchasing shares from Pai as well as NIIF and TPG. About 31% of the business is still owned by Manipal Education and Medical Group Pvt. Ltd., while TPG owns 10% to 11%. In an effort to reduce the risk associated with its investments in the company, Temasek sold up to 8% of it to Mubadala Investment Company (Mubadala), Novo Holdings, and California Public Employees’ Retirement System (CalPERS) last year.

Financial Outlook of the Company

According to India Ratings & Research, the company's sales in the first half of FY24 was INR 26.2 billion, with a consolidated EBITDA of INR 7.41 billion. An India Ratings study from November 2023 states that Manipal Hospitals' consolidated revenue climbed from INR 40 billion in FY22 to INR 48 billion in FY23. According to the study, the company's enhanced case mix and higher in-patient admissions at both its acquired and current facilities helped its consolidated EBITDA margin climb from 23.2% in FY23 to 26.6% in FY23.

According to the report, the hospital company's overall occupancy rates decreased to 58% in FY23 (compared to 64% in FY22) with a net increase of 283 beds, mostly in Whitefield, Goa, and Jaipur. The average revenue per occupied bed at the consolidated level increased by 14% year over year.