May take Max Healthcare brand out of Delhi-NCR

Max Healthcare, the country’s second-largest hospital chain in terms of revenues, is all set for a listing on the bourses this month. Chairman & Managing Director Abhay Soi tells Sohini Das he is open to large acquisitions in new territories. Edited excerpts:

Now that you are listing, what kind of valuation do you expect? Do you think Covid will impact the valuation?

I don’t have any fixed number in mind, but the overall multiples in the industry, which were depressed, seem to be climbing. We see ourselves to be rated along with the best in the industry. The reason: In terms of sales per bed Ebitda margins, we have outperformed the sector in the past three quarters and are fairly certain for this quarter as well. The worst of the pandemic seems to be behind us. We see a lot of patients coming from outside Delhi. Non-Covid occupancy has ramped up significantly. The markets don’t look at present and past, and they are more forward looking. I am hoping to be listed on August 20.

So business is picking up?

The worst really was April, and gradually everything improved — by May, June, July and August, everybody has moved up. If you
see our occupancy levels, which had gone down to 28-29 per cent, have come up to 67-68 per cent, including non-Covid patients.

Are you open to inorganic options as the pandemic may have created distress sale assets?

Even in the worst time during the pandemic, we focussed on cost efficiency and collections. Our liquidity and net balance sheet position and net debt position did not deteriorate. The pandemic did not put any stress on our expansion plans. When we entered the pandemic, we had to put all our plans on pause. We also put on hold all unnecessary expenditure. But that changed quickly because we started moving back towards normalcy. Some players, particularly single hospital set ups, may feel some stress. It will give us some opportunity to consolidate over the next few quarters. My own background has been restructuring on a professional level and, as an expertise, this will be something I would be looking at closely.

Are you open to taking the Max brand outside Delhi-NCR?

We are a metro-centric group and we will be focussing on 200-250 bed hospital assets if they are value accretive in places where we already have presence. If we have to go to new geographies, then the asset has to be sizeable (like a 450-bed facility in Bengaluru). Won’t look at 150-bed nursing homes. – Business Standard