Paras Healthcare IPO raises Rs 652.5 crore from anchor investors

Paras Healthcare raised Rs 652.5 crore from anchor investors on October 19 ahead of its initial public offering, which opens for subscription on October 21 and closes on October 23. The hospital operator has set a price band of Rs 660–693 per share for the Rs 1,450 crore issue.

Economic Times Markets reported that the company allotted 94.15 lakh equity shares to 21 institutional investors in the anchor round, citing an exchange filing. Participants included Abu Dhabi Investment Authority, BlackRock Global Funds, Eastspring Investments, Government Pension Fund Global, Natixis International Funds, Integrated Core Strategies (Asia) and Citigroup Global.

Domestic funds take Rs 385 crore allocation

Nine domestic mutual funds received 55.55 lakh shares worth Rs 385 crore across 24 schemes. The participants were SBI Mutual Fund, HDFC AMC, ICICI Prudential AMC, Kotak Mahindra AMC, WhiteOak Capital, Motilal Oswal AMC, Edelweiss, Baroda BNP Paribas Mutual Fund and ITI Mutual Fund.

Insurers also participated. ICICI Prudential Life Insurance, Edelweiss Life Insurance and Canara HSBC Life Insurance together acquired 6.49 lakh shares valued at Rs 45 crore.

Fresh capital primarily earmarked for debt repayment

The IPO combines a Rs 500 crore fresh issue with a Rs 950 crore offer for sale. Promoter Dharminder Kumar Nagar plans to sell shares worth Rs 300 crore, while Commelina, an affiliate of private equity firm Creador, will sell shares worth Rs 650 crore.

Paras Healthcare intends to use Rs 375 crore of the fresh proceeds to repay part of its debt, with the balance allocated to general corporate purposes. The distinction matters for investors: the fresh issue raises capital for the company, whereas the offer-for-sale proceeds go to the selling shareholders.

JM Financial, BofA Securities India and Nuvama Wealth Management are managing the issue.

Two planned hospitals to increase bed capacity

Paras Healthcare operates eight hospitals under the Paras brand, providing tertiary and quaternary care. Its existing network has 2,211 beds across North India, Bihar and Jharkhand.

The company plans to add a 300-bed hospital in Gurugram and a 500-bed facility in Ludhiana. The Gurugram hospital is expected to begin operations in the current financial year and the Ludhiana facility in the following financial year.

According to the company's red herring prospectus, as cited in the report, these additions are expected to lift total capacity to 3,011 beds by March 2028. These figures represent planned expansion, rather than capacity already in operation.