Manipal Hospitals’ ₹9,275 crore IPO to strengthen balance sheet for growth
India’s largest hospital chain is eyeing a cleaner balance sheet to support its expansion plans post-IPO. Manipal Health Enterprises Ltd plans to use a large portion of the new revenue from its company. ₹9,275 crore IPO to clear outstanding debt, which will pave the way for further growth opportunities, managing director and chief executive officer Dilip Jose said Mint.
The Temasek-backed hospital chain, which launched its initial public offering on Wednesday. ₹8,000 crore with a new number. Yes ₹7,500 crore net debt, ₹10,000 crore gross debt and ₹2,500 crore in cash. Most of the new revenue will be used to pay down debt, Jose said.
“This gives us the opportunity, as the years go by and the operating cash flows come in, to have the ability to borrow money if we want to. As a listed company, we can also access the stock markets again. I don’t think capital will ever be insufficient for growth,” Jose said.
He added that the company will likely keep some cash on its balance sheet after the IPO, while maintaining moderate leverage to fund inorganic growth. “We don’t have to be net zero. What the market expects is a reasonable level of leverage.”
Apart from the fresh issue, the listing includes an offer for sale of up to 21,613,834 shares by the promoters, Temasek’s arm Imperius. Healthcare Investments Pte Ltd and Manipal Education and Medical Group India Pvt. Ltd amounting to ₹1,275.22 crore in the upper price band.
Investors selling shares include TPG SG Magazine Pte Ltd, Seventy Second Investment Co., an arm of Abu Dhabi sovereign wealth fund Mubadala Investment Co. LLC, Ammar Sdn Bhd, Novo Holdings Invest Asia A/S and Phoenix Bear Investments, LLC.
Offer structure, growth through deals
Set a price range ₹560 to ₹590 per share, par value ₹2/- each.
In the last five years, Manipal invested approx. ₹12,000 crore in acquisitions, only approx. ₹2,000 crore was financed through equity capital, while the rest came from debt and internal accruals. “We will continue to grow this way,” Jose said.
Manipal has big-ticket acquisitions in 2025, including the Maharashtra-based Sahyadri Hospitals chain and Amri Hospitals became the largest hospital chain in terms of bed capacity in 2023.
Although it currently has more than 13,000 beds in its network, the company ₹4,000 crore towards organic expansion through greenfield and brownfield projects, which is expected to add around 2,800-3,000 beds in the next three to four years.
On the inorganic front, Manipal expects acquisitions to continue to play a key role even as the nature of deals changes. The company is eyeing opportunities in markets like Kerala and the National Capital Region (NCR), but the target assets may be smaller than before.
“Assets like Sahyadri no longer exist in the near future,” he said. “We will have to look at individual hospitals rather than large networks.”
Despite an aggressive race for expansion among listed hospital operators, Jose dismissed concerns that the competition would become a zero-sum game. “Being number one in terms of capacity is not a goal in itself,” he said. “India is severely underserved in terms of quality hospital beds. The capacity everyone has put in is only a small fraction of what the country needs.”
The listing will also lead to a change in the company’s approach. While the company focuses on long-term growth as a privately owned business, Jose acknowledged that public markets will provide greater scrutiny of quarterly performance, return on capital employed and shareholder expectations.
Key takeaways
- of Manipal ₹The new issue of Rs 8,000 crore will largely eliminate existing outstanding debt obligations.
- The company maintains moderate leverage post-IPO and expects continued access to the debt and equity markets.
- Value of past purchases ₹12,000 crore over five years was financed mostly by debt and not equity.
- Future deals will target individual hospitals, not large networks like Sahyadri or AMRI.
- Listing changes the mindset of the company by enabling review of quarterly performance and return on capital.
