After Max Healthcare Institute Ltd’s impressive debut on the bourses on Friday, Chairman and Managing Director Abhay Soi believes the worst of the Covid-19 crisis may well be over and the company could be looking at a promising future.

Expressing confidence on returning to higher occupancy levels by the fourth quarter, Soi said the lockdown period had hit the company badly with occupancy levels plummeting to as low as 28 per cent. “There has been a gradual uptick since then and we see occupancy levels improving to about 68 per cent. Our intention is to take the occupancy levels to 80-82 per cent. We believe that the worst is behind us,” he said at a media con-call after the listing of the company's shares on the stock exchanges.

Soon after the listing on the BSE, the company’s shares hit the upper circuit, rising 5 per cent to ₹112.3. The shares made a debut on the exchanges at ₹107 with the ringing of the gong at the BSE in the presence of the CMD.

Amalgamation scheme

The listing is the final outcome of the amalgamation of the erstwhile Max India into Max Healthcare and the demerger of the healthcare businesses of Radiant Life into Max Healthcare pursuant to the Composite Scheme of Amalgamation and Arrangement as approved by the National Company Law Tribunal. The resulting merger came into effect on June 1. Radiant Life had acquired a 49.7 per cent stake in Max Healthcare in June 2019, the company said after the listing.

Max, Soi said, is also looking to ramp up revenues by exploring multiple options including brownfield expansion and inorganic expansion in new geographies.

The company plans to focus on the metros for brownfield expansion of beds at a lower capex and rapidly ramp up capacities at the existing locations. He added that the company will continue to invest in high-end tertiary care beds and infrastructure to capitalise on the demand from both domestic and international patients. “We have a large critical mass in markets like Delhi-NCR, which is perhaps the most attractive micro market in India with 40 per cent medical tourism patients coming to this place,” he added.

Focus on metros

Max Healthcare, which has now become India's second largest hospital chain by revenue after Apollo Hospitals, has a strong presence in Delhi-NCR and Mumbai besides Mohali, Bhatinda and Dehradoon. About 85 per cent of its total 2,400 bed capacity is located in Delhi-NCR.

Like any other businesses, the pandemic has dented Max Healthcare’s growth. However, it is looking to reach pre-Covid levels of occupancy by the fourth quarter of the current fiscal.

The company has nearly ₹1,500 crore of debt on the books as on March 31, 2020. For FY20, it recorded net revenues of ₹4,026 crore with an average occupancy of 72.5 per cent over a bed capacity of 3,391 beds.

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