In a significant development for the Indian healthcare sector, the Securities and Exchange Board of India (SEBI) has given its approval for IHH Healthcare Berhad to proceed with open offers for Fortis Healthcare Limited and Fortis Malar Hospitals Limited. This decision marks a crucial step forward in a process that has been ongoing since December 2018.

Key Components of the Transaction

The approved transaction consists of three main elements:

1. Preferential Allotment: IHH Healthcare, through its indirect wholly-owned subsidiary Northern TK Venture Pte Ltd (NTK), will subscribe to 235,294,117 new Fortis shares.

2. Fortis Healthcare Open Offer: A mandatory open offer for up to 197,025,660 additional Fortis shares, representing 26.10% of the expanded voting capital.

3. Fortis Malar Hospitals Open Offer: A separate mandatory open offer for up to 4,894,308 Malar shares, accounting for 26.11% of the voting capital.

Regulatory Approval and Timeline

SEBI communicated its approval through a letter dated October 1. This decision comes after a lengthy process, with initial disclosures made in December 2018. The approval allows IHH Healthcare to move forward with its strategic investment in the Indian healthcare market.

Market Communication

Following the SEBI approval, IHH Healthcare promptly announced the development on the Malaysian Stock Exchange (Bursa Malaysia) on October 3. The company has stated that it will provide updates on further material developments as they occur, ensuring transparency for its shareholders and the market at large.

Implications for Fortis Malar Hospitals

Fortis Malar Hospitals Limited, in compliance with regulatory requirements, disclosed the information to the BSE Limited on October 3. The company's filing, signed by Company Secretary & Compliance Officer Vinti Verma, assured full cooperation and promised to keep the stock exchanges informed of any material developments in this matter.

Looking Ahead

This approval from SEBI represents a significant milestone in IHH Healthcare's expansion strategy in India. It paves the way for potential changes in the ownership and management structure of both Fortis Healthcare and Fortis Malar Hospitals. Stakeholders and market observers will be keenly watching the next steps in this transaction, which could have far-reaching implications for the healthcare landscape in India.

As the situation develops, further announcements are expected from all parties involved, providing more details on the execution of the open offers and their potential impact on the respective companies' operations and strategies.

Fortis Malar Hospitals Limited, a prominent healthcare provider, has released its unaudited financial results for the third quarter ended December 31, 2022, showing a reduction in losses compared to the same period last year.

Financial Performance

The company reported a standalone loss before tax of Rs 1.17 crore for Q3 FY2023, a significant improvement from the Rs 2.71 crore loss recorded in the corresponding quarter of the previous year. This represents a 56.83% reduction in losses year-over-year.

Revenue from operations saw a modest increase, rising to Rs 21.90 crore from Rs 20.45 crore in the same quarter last year, marking a 7.09% growth.

Operational Expenses

Total expenses for the quarter stood at Rs 24.57 crore. The major components of these expenses included:

Key Financial Metrics

• Earnings per share (EPS) for the quarter was negative at Rs 0.62, reflecting the company's current loss-making position.
• The company's revenue growth, coupled with the narrowed losses, suggests potential improvements in operational efficiency.

Ongoing Litigation

Fortis Malar Hospitals is currently dealing with a legal matter concerning the regularization of its hospital building. The Chennai Metropolitan Development Authority has requested certain clearances and certificates. The company has stated that any expenses related to building regularization will be borne by Fortis Health Management Limited, as per their agreement.

Looking Ahead

While Fortis Malar Hospitals continues to face challenges, the reduction in losses and increase in revenue indicate positive momentum. The company's ability to manage expenses and resolve ongoing legal matters will be crucial for its future financial health and operational stability.