New Delhi: Max Healthcare Institute will continue to acquire stressed hospital assets, said chairman and managing director Abhay Soi on Friday after the company was listed on the stock exchanges. Shares of the country's second largest hospital chain, which is Soi's latest acquisition, hit the 5% upper circuit on the first day of listing on exchanges.
The hospital chain’s shares hit the upper circuit at ₹112.35 per share, on the BSE, after opening at ₹107.
“I think M&A and turnarounds have been intrinsic to our growth, and we intend to stick to our knitting. Due to the current financial distress, a lot of hospital chains and balance sheets have been impacted in India. I believe this will throw up a lot of consolidation opportunities for us to consolidate our business and grow it further," Soi said at a virtual press conference.
The company will also look at operations and management contracts with real estate developers and real estate investment trusts. The plan is still in early stages and the company would focus on it once the pandemic ends, Soi said.
Max Healthcare will look at acquiring value-accretive single hospitals that are of reasonable size and scale, and in geographies it is focussing on Delhi NCR and Mumbai, Soi said.
In 2018, Soi had announced a complex deal with Analjit Singh-led Max Group, wherein Max India would hive off its hospital assets under Max Healthcare, and later Radiant Life Care will be merged into the Max group assets.
The deal involved Radiant Life, with support from private equity firm KKR, acquiring 49.7% stake in Max Health Institute Limited (MHIL) for ₹2136 crore in June last year, after which Soi was appointed the CMD. Under the deal, while Soi gets the Max brand for his hospitals, he will have to change the logo.
The process of amalgamation of Radiant Life with Max hospitals was completed in June, and on Friday, the combined Max Healthcare was listed on the exchanges.
The acquisition of Max Healthcare marks the third and largest deal by Soi and his company, Radiant Life.
After spending over a decade turning around distressed assets in unrelated sectors like financial services and speciality chemicals, Soi founded Radiant Life Care Pvt Ltd in 2000.
The company came into prominence when he acquired Dr. B L Kapur Memorial Hospital about a decade later. In 2014, the company also took management control of Mumbai’s prominent Dr. Balabhai Nanavati Hospital.
To be sure, Soi has never built a hospital and instead has only acquired prominent assets, which were in financial duress, especially in metros like Delhi and Mumbai. In an interview, he said he will continue with that strategy.
“For me, I will not be looking at greenfields on my own. It’s an asset light model. If somebody else were to build it to my specifications, that’s another matter but I will not look at greenfields... Also, we like metros, so we will focus on metros because the value proposition from both a doctor’s and a patient’s standpoint is more similar," Soi said in an interview.
While Max Healthcare will not look at greenfield operations, the company does have plans to expand its flagship super speciality hospital at Saket in Delhi, and the Nanavati hospital, Soi said. The company will build another 350 beds at the 521-bed Max Super Speciality Hospital and 600 beds at the 348-bed Nanavati hospital.
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