Fortis may list in Singapore after poor show in India

If India can’t cough up, let’s go to Singapore.

Or so Fortis Healthcare seems to think. Following the backlash that Fortis received after the company was ‘made’ to acquire Singapore-based Fortis International for Rs 3,270 crore ($665 million) from its promoter, the company is now planning to raise funds through an initial public offer (IPO) in Singapore.

[caption id=“attachment_231982” align=“alignleft” width=“380” caption=“After selling their stake in Ranbaxy, brothers Malvinder and Shivinder Singh shifted their focus to the hospital chain Fortis.Reuters”]  [/caption]

After selling their stake in Ranbaxy, brothers Malvinder and Shivinder Singh shifted their focus to the hospital chain Fortis. The brothers went on a shopping spree acquiring healthcare assets from Australia, New Zealand, Singapore, Hong Kong, Vietnam and Sri Lanka.

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Last year Fortis lost out in its battle for acquiring Singapore’s biggest hospital chain, Parkway Holdings, but the promoters had made many acquisitions in Fortis International at breakneck speed before selling the whole bundle to Fortis Healthcare.

These acquisitions were done in their private company, which was then transferred to the listed entity. Investors registered their displeasure in the only way possible - by selling its shares. Fortis Healthcare lost half its value, falling from Rs 150 in September 2011 to a low of Rs 76, a loss of Rs 3,000 crore in share value, which roughly matches the amount the company was made to pay its promoters.

Foreign institutional investors did most of the punishing, and their holdings in the company came down from 8.47 percent to Rs 5.29 percent.

The former promoters of Ranbaxy also left a negative legacy at the company they sold to Daiichi Sankyo. Among themthe recent hit the company had to take on account of filling of false data caused the company to set aside $500 million for settlement.

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This legacy will continue to haunt them wherever they go.

Given the investor response to the news, the company has now decided to tap the Singapore market. With most of its new healthcare assets in East Asia and the Pacific, the company is hopeful of getting a better discounting (higher prices) from the Singapore market.

Due to depressed market conditions in Singapore, the country has not seen any fund raising since October. Fortis’ issue, if it happens, will be the first in Singapore in a while.