The Hindu Business Line : Meltdown worries Wockhardt; IPO review likely

Mumbai, Jan. 22 With nine days to go for the opening of Wockhardt Hospital’s initial public offering (IPO), the management is concerned over the dramatic developments in the stock market. “We will review developments and take a call,” Mr Habil Khorakiwala, Chairman of Wockhardt Hospitals Ltd told media persons, in response to queries whether the IPO would be deferred.

Steering clear of stating whether the management was looking at deferring the IPO, he reiterated that the company would take an appropriate decision when there is more clarity. Currently, the situation is fluid, he said, on a day when the market witnessed shares plummeting nearly 13 per cent during the day and trading being stopped for an hour.

Funding expansion

The pricing is fair, he said and added that any further decisions would depend on the situation becoming clear. Wockhardt Hospitals is looking to mop up about Rs 800 crore through the IPO to fund its expansion across the country through green-field and brown-field projects (setting up hospitals in smaller cities). The company has already invested Rs 500 crore in its existing network of hospitals.

The IPO is set to open on January 31 and close on February 5 and the price band has been fixed between Rs 280 and Rs 310 per equity share. The company has clocked revenues of Rs 236 crore for fiscal 2007, and Rs 259 crore for the nine months ended December 31, 2007. Promoters will hold 71.20 per cent in the hospital-retail company after the IPO.

Mr Vishal Bali, Managing Director of Wockhardt Hospitals, said that after having set up its first hospital in Kolkata in 1989, the company currently has a network of 15 hospitals and a bed strength of 1,374 beds. The company is looking to expand to 31 hospitals in two years, increasing the bed strength of 4,780 beds.

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