Fortis's Singh Plans IPO of India Pathology Unit, to Sell Health Insurance

Fortis Healthcare Ltd. plans to list its pathology unit in India next year and is seeking other acquisitions in Asia after walking away from a bidding war for the region’s largest hospital operator.

The company also plans to start a health insurance business in India and is in talks with the country’s regulators, billionaire Chairman Malvinder Singh said in an interview in Singapore today. He declined to say when the business may begin.

Fortis will forge ahead with plans to use Singapore as a base to become a “pan-Asia health-care leader” and has a team scouting for opportunities in the region, Singh said. New Delhi- based Fortis agreed to sell its stake in Parkway Holdings Ltd. this week after Malaysia’s Khazanah Nasional Bhd. trumped an offer by the Indian company to take over the Singapore-based hospital operator.

“In Asia we see huge opportunities for health care,” said Singh, 37. “We see a substantial demand-supply gap. Asia is in a strong position from a GDP-growth viewpoint and the need for health care.”

Singh, based in Singapore, said the Indian company is looking at investing in the city-state. He declined to give details on possible targets and how much might be spent. Fortis may also have its shares traded in Singapore to tap capital markets in the city, Singh said, without giving a timeframe.

Fortis gained less than 0.1 percent to 157.10 rupees at the 3:30 p.m. close in Mumbai trading, while India’s benchmark Sensitive Index rose 0.2 percent.

‘Vehicle and Platform’

“Parkway was a vehicle and platform that we wanted to build upon and leverage in order to achieve our vision,” Singh said. “It’s not Parkway today, it will be something else.”

Fortis is expanding in pathology services through its Super Religare Laboratories Ltd. business. Super Religare said July 14 it agreed to buy Piramal Healthcare Ltd.’s diagnostics unit for 6 billion rupees ($129 million). Singh said the combined entity is the biggest pathology company in Asia outside Japan.

Singh plans to list the pathology company on the Bombay Stock Exchange. The executive, who has an MBA from Duke University’s Fuqua School of Business, declined to specify how much the company will seek in the initial public offering.

The chairman said Fortis, which operates 48 hospitals in India, will build 10 more in the country in the next two years, adding about 2,500 beds.

Besides investments in India, Fortis has a hospital in Mauritius and one in Afghanistan, “but that will change soon,” Singh said. “Our growth in this region will be a mix of organic, inorganic and managing facilities,” he said.

Billionaire Brothers

Shivinder Singh, 35, Malvinder’s brother, is managing director of Fortis. The two have a net worth of $3.2 billion, ranking them at 297 in the list of the world’s richest people and among the 20 wealthiest in India, according to Forbes magazine.

Singh and his family gained about $2 billion from selling their 35 percent stake in Ranbaxy Laboratories Ltd. to Tokyo- based Daiichi Sankyo Co. in 2008. The Singhs also own the Religare group whose operations include wealth management, investment banking and life insurance.

The health insurance business will be done through a venture with Religare, providing medical coverage nationally, Singh said. A chief executive officer has been appointed for the new business, he said, declining to say when it would start.

Fortis has “substantial” funds for investments, including about S$1.2 billion ($880 million) from the sale of the 25 percent Parkway stake, the chairman said.

“If Fortis would require additional funding, there is a clear commitment from the family side to do it in Fortis or along with Fortis,” Singh said. “Fortunately for us, raising funding has never been an issue.”

To contact the reporters on this story: Jason Gale in Singapore at j.gale@bloomberg.net; Lena Lee in Singapore at llee42@bloomberg.net.

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