Medi Assist Healthcare Services , a leader in health benefits administration, has announced a significant move to strengthen its financial position and shareholding structure. The company's board has approved raising ₹198.00 crore through a preferential allotment of shares to two marquee investors.

Key Highlights of the Preferential Issue

• Medi Assist will issue up to 37,01,000 equity shares at ₹535.00 per share.
• The issue price represents a slight premium to the floor price of ₹534.53, calculated as per SEBI regulations.
• Massachusetts Institute of Technology will subscribe to 28,90,830 shares, investing ₹154.65 crore.
• 238 Plan Associates LLC will subscribe to 8,10,170 shares, investing ₹43.34 crore.
• Both investors are registered as Foreign Portfolio Investors (FPIs) with SEBI.

Utilization of Funds

The company plans to use the proceeds for two primary purposes:

1. Investment in its wholly-owned subsidiary, Medi Assist Insurance TPA Pvt. Limited, to repay or prepay outstanding borrowings.
2. General corporate purposes, which may include meeting ongoing expenses and investments.

Impact on Shareholding

Post-issue, the promoter group's stake is expected to decrease from 20.55% to 19.53%. The public shareholding will increase, with Foreign Portfolio Investors' stake rising from 13.89% to 17.09%.

Recent Financial Performance

In its latest quarterly results, Medi Assist reported:

EBITDA margins expanded to 22.1%.

Strategic Moves

The preferential issue follows Medi Assist's recent acquisition of Paramount Health Services & Insurance TPA Private Limited for ₹412.40 crore, which the company describes as the largest TPA transaction by size in India.

Market Position

Medi Assist holds a combined market share of 23.1% in the group and retail segment of the Indian health insurance industry by premiums under management.

Conclusion

This preferential issue represents a strategic move by Medi Assist to optimize its capital structure and create a runway for future growth. The participation of institutional investors like MIT signals confidence in the company's business model and growth prospects in the evolving healthcare administration sector.

Shareholders will vote on the preferential issue at an Extraordinary General Meeting. The company has emphasized that the allotment will be subject to necessary regulatory approvals and compliance with SEBI regulations.

Medi Assist Healthcare , a leader in the health benefits administration space, has announced plans to raise ₹198.00 crore through a preferential issue of equity shares. The company's board has approved the issuance of 37,01,000 equity shares at ₹535.00 per share to two qualified institutional buyers (QIBs).

Key Details of the Preferential Issue

• Issue Size: 37,01,000 equity shares
• Issue Price: ₹535.00 per share (including a premium of ₹530.00)
• Total Funds to be Raised: ₹198.00 crore
• Investors: Massachusetts Institute of Technology and 238 Plan Associates LLC

Allocation of Shares

Use of Proceeds

The company plans to utilize the funds raised through this preferential issue for the following purposes:

1. Investment in Subsidiary: A significant portion of the proceeds will be invested in Medi Assist Insurance TPA Pvt. Limited, a wholly-owned material subsidiary of the company. This investment will be used to prepay or repay outstanding borrowings of the subsidiary.

2. General Corporate Purposes: Up to 25% of the issue proceeds will be used for general corporate purposes, including meeting ongoing corporate exigencies, expenses, and investments.

Market Position and Recent Developments

Medi Assist Healthcare Services holds a strong position in the Indian health insurance industry with a combined market share of 23.1% in the group and retail segments. The company recently completed the acquisition of Paramount Health Services for ₹412.40 crore, which is reported to be the largest TPA transaction by size in India.

Shareholder Approval and Voting Process

The company has scheduled an Extraordinary General Meeting (EGM) on September 4 to seek shareholder approval for the preferential issue. The EGM will be conducted through video conferencing or other audio-visual means. Shareholders can participate in remote e-voting from September 1 to September 3, with the cut-off date for eligibility set as August 28.

Impact on Shareholding

Post the preferential issue, the shareholding of Massachusetts Institute of Technology and 238 Plan Associates LLC in the company will be 3.89% and 1.09% respectively, on a non-diluted basis.

This capital raise is expected to strengthen Medi Assist Healthcare Services' financial position and support its growth initiatives in the health benefits administration sector.