Religare offers units at 90 cents each, sets aside less than 5% for public tranche
RELIGARE Health Trust (RHT) yesterday launched its Singapore Exchange listing, making it the first India-based health-care business trust in the market here.
The trust priced its debut at 90 cents and plans to raise about $511 million from the initial public offering (IPO).
Most of the 567.45 million units it launched were placement shares meant for institutional investors, with just under 5 per cent set aside for retail investors.
But the chief executive of RHT's trustee-manager, Mr Ravi Mehrotra, said he expects there will be ample retail demand for the trust's units.
"Health care in India is a growing market because of the large and growing population and changing demographics. Coupled with the growing Indian economy and rising affluence, this is something we're hoping to capitalise on," he said in an interview with The Straits Times. The success of the recent IPO of IHH Healthcare shows the level of investor appetite for such investments, Mr Mehrotra said.
IHH launched a dual listing - here and in Malaysia - in July. Its public tranche in Singapore was more than 11 times subscribed and its share price has surged almost 15 per cent since its debut.
"RHT is a different proposition to pure health-care plays in the market - it offers upside exposure to health care with stabilised returns through the base service fee component."said Mr Mehrotra.
RHT's distribution yield is expected to be 8.9 per cent in fiscal year 2013 and 9.1 per cent in 2014.
RHT's portfolio will start with 11 clinical establishments, two hospitals managed and operated by the trust and four greenfield clinical establishments across India worth a total of $748 million.
The trust has ample capacity to grow this portfolio, said Mr Mehrotra.
"The number of operational beds we have now is close to 1,800 but without significant expenditure this can be raised to just under 3,200 beds," he said. "We also have undeveloped greenfield sites where we can build another 870 beds."
He said RHT has the right of first refusal with parent company Fortis Healthcare in and out of India. This means that if Fortis were to divest any of its health-care assets, RHT would have the first rights to acquire them.