Meanwhile, IHH would be infusing about Rs 20 billion to meet additional fund requirements of Fortis Group. It has already infused Rs 40 billion as part of an earlier deal.
The additional fund infusion would be for buying out the 31 per cent stake in SRL held by private equity (PE) entities, apart from funds required for the statutory open offer, working capital, and other requirements.
In response to Business Standard queries, IHH said it did not comment on market speculation.
Sources claim plans are afloat to demerge SRL from Fortis Healthcare (an exercise taken up by Fortis earlier and then dropped). And, to then list it on the bourses. The process could take from six months to a year.
The PE players in SRL are looking at an immediate exit. IHH has had discussion with them would be buying out their stake for Rs 11-12 billion. An agreement could be signed soon.
IHH also hopes to conclude the open offer for Fortis shareholders by the end of this year. Thereafter, it plans to focus on growing the hospital and the diagnostics business.
The Malaysian major also has plans to take the SRL brand abroad, especially in the Southeast Asian markets where it has strong presence. “There are global plans for SRL,” said a source, without elaborating.
SRL showed improvement in its margins in the September quarter, over the June one. At 23 per cent, these lag peers. Thyrocare Technologies’ is, for instance, over 40 per cent.
“The new management is committed to growing the business of both Fortis and SRL, and has already infused Rs 40 billion in Fortis, much of which is going to complete the acquisition of Religare Health Trust (RHT) assets,” claimed the sources.
Singapore-based RHT owns the hospital assets of Fortis, leased back to the hospitals to pursue an asset-light model. Such an arrangement was made by the former management of Fortis, led by Malvinder and Shivinder Singh. Fortis is all set to buy back the RHT assets, as trust costs account for almost 30 per cent of the operating cost of the hospital business.
The former promoters of Fortis, too, had planned to list SRL. However, things did not move as planned. Earlier this year, Fortis board had asked the Singh brothers to step down from the board of SRL Diagonistics.