Fortis Healthcare Subsidiary Receives ₹597.93 Crore GST Demand Order from Tamil Nadu

Fortis Healthcare has received a credit rating reaffirmation from CRISIL Ratings, maintaining its strong financial standing in the healthcare sector. The rating agency has reaffirmed the company's ratings at 'CRISIL AA+/Stable/CRISIL A1+' for both bank facilities and non-convertible debentures, reflecting the healthcare giant's robust operational performance and strategic market position.

GST Order Against Subsidiary

Fortis Health Management Limited, a wholly-owned subsidiary of Fortis Healthcare, has received a significant GST order from Tamil Nadu tax authorities. The State Tax Officer (ST)- Group IX, Chengalpattu Intelligence Division has confirmed a demand against the subsidiary:

GST Order Details	Amount (₹ Lakhs)
Total Demand	597.93
Principal Amount	259.32
Interest	79.29
Penalty	259.32
Original Show Cause Notice	570.00

The order, received on January 02, 2026, relates to the denial of GST exemption claims for healthcare services. The original show cause notice was issued for ₹570.00 lakhs including penalty of ₹285.00 lakhs for fiscal year 2023-24.

Company's Response and Legal Position

Fortis Healthcare has indicated its intention to challenge the GST order through appropriate legal channels:

Response Parameters	Details
Company Assessment	Demand not maintainable
Planned Action	Filing appeal against the order
Expected Financial Impact	No relevant impact anticipated
Operational Impact	No impact on operations or activities

The company maintains that based on its assessment, the demand is not sustainable and does not expect any material impact on its financial performance, operations, or other business activities.

Rating Details and Scope

The CRISIL reaffirmation covers substantial financial instruments across Fortis Healthcare's portfolio:

Instrument Type	Amount	Rating
Total Bank Loan Facilities	₹425.98 crores	CRISIL AA+/Stable (Long Term), CRISIL A1+ (Short Term)
Non-Convertible Debentures	₹1,550.00 crores	CRISIL AA+/Stable

The rating action builds upon the previous upgrade when CRISIL elevated the long-term ratings from 'CRISIL AA/Stable' to 'CRISIL AA+/Stable' while maintaining the short-term rating at 'CRISIL A1+'.

Strong Operational Performance

Fortis Healthcare demonstrated impressive financial growth during the first half of fiscal 2026:

Financial Metric	H1 FY26	H1 FY25	Growth
Consolidated Revenue	₹4,498 crores	₹3,847 crores	+17% YoY
Hospital Business Growth	-	-	+19% YoY
Diagnostics Business Growth	-	-	+7% YoY
Operating Profit Margin	23.30%	20.20%	+310 bps
Hospital Business Margin	22.50%	-	+250 bps improvement
Diagnostics Business Margin	27.50%	-	+640 bps improvement

Market Position and Infrastructure

Fortis Healthcare maintains its position as one of India's largest hospital chains with an extensive network:

Infrastructure Details	Count/Coverage
Hospitals	33 across 11 states
Operational Beds	5,700+ (including JVs and O&M agreements)
JCI Accredited Hospitals	4 hospitals
NABH Accredited Hospitals	26 hospitals
Agilus Laboratories	400+ laboratories
Customer Touchpoints	4,000+ across India

Financial Health and Growth Strategy

CRISIL's assessment highlights Fortis Healthcare's healthy financial risk profile:

Financial Parameter	Current Status	Projection
Gearing Ratio	0.50 times (FY25)	Below 0.60 times (FY26)
Net Debt/EBITDA	1.26 times (FY25)	Below 1.50 times (FY26)
Expected Revenue Growth	-	10-12% (FY26-28)
Target Operating Margin	-	22-25% (medium term)
Planned Bed Addition	-	1,200-1,500 beds (FY26-28)

The company's liquidity position remains strong with ₹413 crores in cash and cash equivalents, and expected net cash accrual of ₹1,200-1,400 crores annually over fiscals 2026-2028.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-2.53%	+3.74%	+3.21%	+13.78%	+24.74%	+459.52%

Fortis Healthcare Limited has disclosed the receipt of GST orders from Tamil Nadu authorities with significant financial implications totaling ₹2,139.61 crores. The healthcare major made this disclosure under Regulation 30 of SEBI Listing Obligations and Disclosure Requirements Regulations on December 30, 2025.

GST Orders and Financial Impact

The GST Authority from State Tax Officer (ST) - Group IX, Chengalpattu Intelligence Division, Tamil Nadu had initially issued show cause notices across three financial years. The confirmed demands following the company's response are substantially higher than the initial notices.

Financial Year:	Initial Notice Amount	Confirmed Demand	Interest	Penalty
FY 2020-21:	₹469.63 crores	₹478.08 crores	₹142.02 crores	₹168.03 crores
FY 2021-22:	₹678.09 crores	₹850.00 crores	₹212.16 crores	₹318.92 crores
FY 2022-23:	₹668.83 crores	₹811.53 crores	₹158.58 crores	₹326.47 crores
Total:	₹1,816.55 crores	₹2,139.61 crores	₹512.76 crores	₹813.42 crores

Timeline of Events

The GST orders were received on specific dates in December 2025:

FY 2020-21 Order: December 29, 2025 at 5:46 PM
FY 2021-22 Order: December 29, 2025 at 5:53 PM
FY 2022-23 Order: December 30, 2025 at 4:38 PM

Regulatory Compliance

The company has fulfilled its disclosure obligations under SEBI regulations by providing detailed information about the litigation. The disclosure includes comprehensive details about the opposing party, the nature of disputes, and expected financial implications. Fortis Healthcare noted that show cause notices related to balance amounts beyond the confirmed demands have been dropped by the GST Authority.

Company Response

Following the initial show cause notices, Fortis Healthcare submitted its response to the GST Authority. After reviewing the company's submissions, the authority passed final orders confirming the demands with applicable interest and penalties. The total confirmed amount of ₹2,139.61 crores represents a significant financial exposure for the healthcare company across the three-year period from FY 2020-21 to FY 2022-23.