DM Healthcare Group, which operates hospitals in the UAE under the Medcare and Aster brand names is planning an initial public offering by the first quarter of 2015 to fund expansion beyond its current markets of the Arabian Gulf and India.
The hospital, clinic and pharmacy group is looking at the London, Dubai and Indian stock exchanges for the IPO, and is not ruling out a dual listing.
DM Healthcare, which also currently operates in Oman, Qatar and Saudi Arabia, is in talks to open pharmacies and clinics in Kuwait. The company is also exploring opportunities in Jordan.
Any IPO funds raised by DM Healthcare would be used for further expansion.
"As per our Vision 2025, we will be one of the large healthcare companies in the world," said Dr Azad Moopen,the chairman and managing director of DM Healthcare Group who founded the company in Dubai more than 20 years ago. "With our private equity valuation we are at par with other hospital groups that have issued IPOs. It is after the public market that we are going."
In June, Abu Dhabi's Al Noor Hospitals Group raised US$342 million through a London IPO, valuing the company at more than US$1 billion. NMC Healthcare, also listed in London, has a market capitalisation of about $850 million.
"The companies are considering IPOs to raise capital to invest in opportunities in the region, and to take advantage of a source of funding that has recently emerged," said Charles Weston, the director of equity research at London-based Numis Securities who covers NMC.
Moreover, "the financial markets have improved following a long period of difficulty when IPOs were infrequent", he said.
With mandatory health insurance likely to come into effect in Dubai, Sharjah and Qatar over the next couple of years, healthcare companies will see a rise in demand similar to the effect seen in Abu Dhabi from 2007, Mr Weston said. "Capacity expansion is therefore required, and capital is therefore required to be deployed."
The group expects a turnover of Dh1.6bn for its Gulf operations for this year with a growth of 30 per cent over last year. DM Healthcare has three hospitals in the UAE, 89 pharmacies and 33 clinics.
In Dr Moopen's native southern Indian state of Kerala, the company expects to invest more than $300m through four hospital projects.
The company is building a hospital in Qatar and three more in the UAE. That includes an Aster hospital in the Mankhool area of Dubai, a hospital in Sharjah, and a women and children speciality hospital under the Medcare brand on Sheikh Zayed Road in Dubai. It is also looking for an investor to enter the Abu Dhabi hospital market.
In December, the group launched its budget brand of clinics called Access, and currently has three under the new line in Jebel Ali, Sonapur and Deira.
The group plans 25 Access clinics in the UAE, Qatar, Oman and Kuwait by the end of next year.
Almost 60 per cent of the DM Healthcare Group is owned by Dr Moopen's family and 35 per cent by two private equity companies. The remaining 5 per cent is owned by a local partner.
