CK Birla Healthcare to raise $150m to expand, cut debt

Mumbai: CK Birla Healthcare, the wholly owned healthcare arm of $3-billion CK Birla Group, plans to raise about $150 million (₹1,250 crore) by selling a minority stake, said people aware of the matter.

The healthcare company has tapped Kotak Mahindra Capital to run the fundraising process, the people said, adding the promoters have begun initial talks with global and domestic funds. The size of the stake sale could not be ascertained. A spokesperson for CK Birla Healthcare declined to comment.

CK Birla Healthcare consists of five hospitals spanning Gurugram, Delhi, Kolkata and Jaipur, along with infertility clinics under the Birla IVF brand. Currently, Birla IVF has about 37 centres across the country.

Besides a hospital each in Delhi and Gurugram, it owns the 440-bed Calcutta Medical Research Institute (CMRI) and 150-bed BM Birla Heart Research Centre in Kolkata, and 230-bed Rukmani Birla Hospital in Jaipur. It plans to add another 15 hospitals with 80-100 beds each over the next few years.

Besides expansions, the proposed fund will be used for reducing debt. As on March 2024, the company had a debt of ₹454.70 crore, including unsecured loans from group companies of ₹163.30 crore and lease liabilities of ₹181.56 crore.The company’s total revenue from operations grew by 34% in FY24 to ₹294 crore led by healthy growth in the hospital and IVF segments.Last fiscal’s improved operating performance was driven by robust increase in profitability in the hospital segment while profitability in the IVF segment remained subdued, according to a CARE Ratings report. Revenue from the hospital segment accounted for 75% of the total revenue, with the IVF segment contributing the remainder.

CK Birla Healthcare opened the Gurugram and New Delhi hospitals in October 2017 and September 2021, respectively. The company forayed into the IVF business in 2021. In FY24, it added 10 IVF centres which supported revenue growth.