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DRAFT RED HERRING PROSPECTUS Dated: July 24, 2015
(The Draft Red Herring Prospectus will be updated upon filing with the RoC) (Please read Section 32 of the Companies Act, 2013)
100% Book Built Offer
HEALTHCARE GLOBAL ENTERPRISES LIMITED
Our Company was originally incorporated as Curie Centre of Oncology Private Limited on March 12, 1998 at Bengaluru, Karnataka, India as a private limited company under the Companies Act, 1956. The name of our Company was subsequently changed to HealthCare Global Enterprises Private Limited and a fresh certificate of incorporation consequent upon change of name was issued by the RoC on November 14, 2005. Our Company was converted into a public limited company pursuant to a special resolution passed by our Shareholders at the extraordinary general meeting held on May 20, 2006 and the name of our Company was changed to HealthCare Global Enterprises Limited. A fresh certificate of incorporation consequent upon conversion to a public limited company was issued by the RoC on July 5, 2006. For details of change in the name and registered office of our Company, see History and Certain Corporate Matters on page 177.
Registered Office: HCG Tower, No. 8, P Kalinga Rao Road, Sampangi Rama Nagar, Bengaluru 560 027, Karnataka, India Contact Person: Sunu Manuel, Company Secretary and Compliance Officer; Tel: +91 80 4660 7700; Fax: +91 80 4660 7749
E-mail: investors@hcgoncology.com; Website: www.hcgel.com Corporate Identification Number: U15200KA1998PLC023489
OUR PROMOTERS: DR. BS AJAI KUMAR, DR. GANESH NAYAK, DR. BS RAMESH, DR. KS GOPINATH AND DR. M GOPICHAND PUBLIC OFFER OF UP TO 31,098,000 EQUITY SHARES OF FACE VALUE OF `10 EACH (EQUITY SHARES) OF HEALTHCARE GLOBAL ENTERPRISES LIMITED (COMPANY OR ISSUER) FOR CASH AT A PRICE OF `[] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF `[] PER EQUITY SHARE) AGGREGATING UP TO `[] MILLION (OFFER) COMPRISING A FRESH ISSUE OF UP TO 11,600,000 EQUITY SHARES AGGREGATING UP TO `[] MILLION (FRESH ISSUE) AND AN OFFER FOR SALE OF UP TO 19,498,000 EQUITY SHARES BY THE SELLING SHAREHOLDERS (AS DEFINED HEREUNDER) AGGREGATING UP TO `[] MILLION (OFFER FOR SALE). THE OFFER WOULD CONSTITUTE 36.83% OF OUR POST-OFFER PAID-UP EQUITY SHARE CAPITAL. THE FACE VALUE OF EQUITY SHARES IS `10 EACH. THE PRICE BAND AND THE MINIMUM BID LOT WILL BE DECIDED BY OUR COMPANY AND THE INVESTOR SELLING SHAREHOLDERS (AS DEFINED HEREUNDER) IN CONSULTATION WITH THE BRLMS AND WILL BE ADVERTISED IN [] EDITIONS OF [], [] EDITIONS OF [] AND [] EDITIONS OF [] (WHICH ARE WIDELY CIRCULATED ENGLISH, HINDI AND KANNADA NEWSPAPERS RESPECTIVELY, KANNADA BEING THE REGIONAL LANGUAGE OF KARNATAKA, WHERE OUR REGISTERED OFFICE IS LOCATED) AT LEAST FIVE WORKING DAYS PRIOR TO THE BID/OFFER OPENING DATE AND SHALL BE MADE AVAILABLE TO THE BSE LIMITED AND THE NATIONAL STOCK EXCHANGE OF INDIA LIMITED FOR THE PURPOSE OF UPLOADING ON THEIR WEBSITES. In case of any revision in the Price Band, the Bid/Offer Period will be extended by at least three additional Working Days after such revision in the Price Band, subject to the Bid/Offer Period not exceeding 10 Working Days. Any revision in the Price Band and the revised Bid/Offer Period, if applicable, will be widely disseminated by notification to BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE), by issuing a press release, and also by indicating the change on the website of the BRLMs and at the terminals of the Syndicate Members. In terms of Rule 19(2)(b)(ii) of the Securities Contracts (Regulation) Rules, 1957, as amended (SCRR), and in accordance with Regulation 26(2) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended (the SEBI ICDR Regulations), the Offer is being made for at least such percentage of Equity Shares equivalent to the value of `4,000 million and the post-Offer capital of our Company at the Offer Price is more than `16,000 million but less than or equal to `40,000 million. The Offer is being made through the Book Building Process wherein at least 75% of the Offer shall be Allotted on a proportionate basis to Qualified Institutional Buyers (QIBs), provided that our Company in consultation with the Investor Selling Shareholders may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis, out of which one-third shall be reserved for domestic Mutual Funds only, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Offer Price, in accordance with the SEBI ICDR Regulations. 5% of the QIB Portion (excluding the Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders (other than Anchor Investors), including Mutual Funds, subject to valid Bids being received at or above the Offer Price. Further, not more than 15% of the Offer shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not more than 10% of the Offer shall be available for allocation to Retail Individual Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. All potential investors, other than Anchor Investors, may participate in this Offer through an Application Supported by Blocked Amount (ASBA) process providing details of their respective bank account which will be blocked by the Self Certified Syndicate Banks (SCSBs). QIBs (except Anchor Investors) and Non-Institutional Bidders are mandatorily required to utilise the ASBA process to participate in this Offer. For details, see Offer Procedure on page 319.
RISK IN RELATION TO THE FIRST OFFER This being the first public issue of our Company, there has been no formal market for the Equity Shares. The face value of the Equity Shares is `10 and the Floor Price is [] times the face value and the Cap Price is [] times the face value. The Offer Price (determined and justified by our Company in consultation with the Investor Selling Shareholders and the BRLMs as stated under Basis for Offer Price on page 118) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing.
GENERAL RISKS Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in the Offer unless they can afford to take the risk of losing their entire investment. Investors are advised to read the risk factors carefully before taking an investment decision in the Offer. For taking an investment decision, investors must rely on their own examination of our Company and the Offer, including the risks involved. The Equity Shares in the Offer have not been recommended or approved by the Securities and Exchange Board of India (SEBI), nor does SEBI guarantee the accuracy or adequacy of the contents of this Draft Red Herring Prospectus. Specific attention of the investors is invited to Risk Factors on page 16.
ISSUERS AND SELLING SHAREHOLDERS ABSOLUTE RESPONSIBILITY Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Red Herring Prospectus contains all information with regard to our Company and the Offer, which is material in the context of the Offer, that the information contained in this Draft Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Draft Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. The Other Selling Shareholders severally and not jointly accept responsibility that this Draft Red Herring Prospectus contains all information about them as Other Selling Shareholders in the context of the Offer for Sale and further assume responsibility for statements in relation to them included in this Draft Red Herring Prospectus. Further, the Investor Selling Shareholders severally and not jointly, accept responsibility only for statements expressly made by such Investor Selling Shareholder in relation to itself in this Draft Red Herring Prospectus.
LISTING The Equity Shares offered through the Red Herring Prospectus are proposed to be listed on the BSE and the NSE. Our Company has received an in-principle approval from the BSE and the NSE for the listing of the Equity Shares pursuant to letters dated [] and [], respectively. For the purposes of the Offer, the Designated Stock Exchange shall be [].
BOOK RUNNING LEAD MANAGERS
Kotak Mahindra Capital Company Limited 1st Floor, 27 BKC, Plot No. 27 G Block, Bandra Kurla Complex Bandra (East), Mumbai 400 051 Maharashtra, India Tel: +91 22 4336 0000 Fax: +91 22 6713 2447 E-mail: hcg.ipo@kotak.com Investor grievance email: kmccredressal@kotak.com Website: www.investmentbank.kotak.com Contact Person: Ganesh Rane SEBI Registration No.: INM000008704
Edelweiss Financial Services Limited 14th Floor, Edelweiss House Off CST Road, Kalina Mumbai 400 098 Maharashtra, India Tel: + 91 22 4009 4400 Fax: +91 22 4086 3610 Email: hcg.ipo@edelweissfin.com Investor grievance email: customerservice.mb@edelweissfin.com Website: www.edelweissfin.com Contact Person: Siddharth Shah/Vivek Kumar SEBI Registration No.: INM0000010650
Goldman Sachs (India) Securities Private Limited Rational House 951-A, Appasaheb Marathe Marg Prabhadevi, Mumbai 400 025 Maharashtra, India Tel: +91 22 6616 9000 Fax: +91 22 6616 9090 Email: gs-hcg-ipo@gs.com Investor grievance email: india-client-support@gs.com Website: http://www.goldmansachs.com/worldwide/india/offerings.html Contact Person:Dipak Daga SEBI Registration No.: INM000011054
REGISTRAR TO THE OFFER
IDFC Securities Limited Naman Chambers, C-32, G Block Bandra Kurla Complex Bandra (East), Mumbai 400 051 Maharashtra, India Tel: +91 22 6622 2600 Fax: +91 22 6622 2501 Email: hcg.ipo@idfc.com Investor grievance email: investorgrievance@idfc.com Website: www.idfccapital.com Contact Person: Gaurav Goyal SEBI Registration No.: MB/INM000011336
IIFL Holdings Limited 8th Floor, IIFL Centre Kamala City, Senapati Bapat Marg Lower Parel (West), Mumbai 400 013 Maharashtra, India Tel: +91 22 4646 4600 Fax: +91 22 2493 1073 Email: hcg.ipo@iiflcap.com Investor grievance email: ig.ib@iiflcap.com Website: www.iiflcap.com Contact Person: Pinak Bhattacharyya/Vishal Bangard SEBI Registration No.: INM000010940
Yes Bank Limited Yes Bank Tower, IFC, Tower 2, 18th Floor Senapati Bapat Marg, Elphinstone (West) Mumbai 400 013 Maharashtra, India Tel: +91 22 3366 9000 Fax: +91 22 2421 4508 Email: dlhcgipo@yesbank.in Investor grievance email: merchantbanking@yesbank.in Website: www.yesbank.in Contact Person: Dhruvin Mehta SEBI Registration No.: MB/INM000010874
Karvy Computershare Private Limited Karvy Selenium Tower B Plot 31-32, Gacchibowli Financial District, Nanakramguda Hyderabad 500 032 Tel: +91 40 6716 2222 Fax: +91 40 2343 1551 E-mail: einward.ris@karvy.com Investor grievance email: hcglobal.ipo@karvy.com Website: www.karisma.karvy.com Contact Person: Rakesh Santhalia SEBI Registration No.: INR000000221
BID/OFFER PROGRAMME BID/OFFER OPENS ON [](1) BID/OFFER CLOSES ON [](2) (1) Our Company may, in consultation with the Investor Selling Shareholders and the BRLMs, consider participation by Anchor Investors in accordance with the SEBI ICDR Regulations. The Anchor Investor
Bid/Offer Period shall be one Working Day prior to the Bid/Offer Opening Date (2) Our Company may, in consultation with the Investor Selling Shareholders and the BRLMs, consider closing the Bid/Offer Period for QIBs one Working Day prior to the Bid/Offer Closing Date in accordance
with the SEBI ICDR Regulations
I D F C IIFL
http://www.hcgoncology.com/http://www.google.co.in/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=CZ7rKzwOMyXsnM&tbnid=B8FWrCqEMSRLzM:&ved=0CAcQjRw&url=http://commons.wikimedia.org/wiki/File:Goldman_Sachs.svg&ei=ESM2VPu0NNjkuQS9u4KACg&bvm=bv.76943099,d.c2E&psig=AFQjCNHcrZKeQD35n5nbnxC9NPe8JtesXg&ust=1412920361090281
TABLE OF CONTENTS
SECTION I: GENERAL ...................................................................................................................................... 2
DEFINITIONS AND ABBREVIATIONS ......................................................................................................... 2 PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA .................................................... 12 FORWARD-LOOKING STATEMENTS ........................................................................................................ 14
SECTION II: RISK FACTORS ........................................................................................................................ 16
SECTION III: INTRODUCTION .................................................................................................................... 45
SUMMARY OF INDUSTRY ........................................................................................................................... 45 SUMMARY OF OUR BUSINESS ................................................................................................................... 49 SUMMARY OF FINANCIAL INFORMATION ............................................................................................. 55 THE OFFER ..................................................................................................................................................... 63 GENERAL INFORMATION ........................................................................................................................... 65 CAPITAL STRUCTURE ................................................................................................................................. 74 OBJECTS OF THE OFFER ............................................................................................................................ 110 BASIS FOR OFFER PRICE ........................................................................................................................... 118 STATEMENT OF TAX BENEFITS .............................................................................................................. 121
SECTION IV: ABOUT OUR COMPANY ..................................................................................................... 135
INDUSTRY OVERVIEW .............................................................................................................................. 135 OUR BUSINESS ............................................................................................................................................ 147 REGULATIONS AND POLICIES ................................................................................................................. 171 HISTORY AND CERTAIN CORPORATE MATTERS ................................................................................ 177 OUR MANAGEMENT .................................................................................................................................. 193 OUR PROMOTERS ....................................................................................................................................... 210 OUR GROUP ENTITIES ............................................................................................................................... 214 RELATED PARTY TRANSACTIONS ......................................................................................................... 219 DIVIDEND POLICY ..................................................................................................................................... 220
SECTION V: FINANCIAL INFORMATION ............................................................................................... 221
FINANCIAL STATEMENTS ........................................................................................................................ 221 FINANCIAL INDEBTEDNESS .................................................................................................................... 222 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS ............................................................................................................................................... 254
SECTION VI: LEGAL AND OTHER INFORMATION ............................................................................. 277
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ..................................................... 277 GOVERNMENT AND OTHER APPROVALS ............................................................................................. 290 OTHER REGULATORY AND STATUTORY DISCLOSURES .................................................................. 293
SECTION VII: OFFER INFORMATION ..................................................................................................... 311
TERMS OF THE OFFER ............................................................................................................................... 311 OFFER STRUCTURE .................................................................................................................................... 314 OFFER PROCEDURE ................................................................................................................................... 319 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ............................................... 372
SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION............................................ 373
SECTION IX: OTHER INFORMATION ..................................................................................................... 483
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ........................................................ 483 DECLARATION ............................................................................................................................................. 486
2
SECTION I: GENERAL
DEFINITIONS AND ABBREVIATIONS
This Draft Red Herring Prospectus uses certain definitions and abbreviations which, unless the context
otherwise indicates or implies, shall have the meaning as provided below. References to any legislation, act,
regulation, rules, guidelines or policies shall be to such legislation, act or regulation, as amended from time to
time.
General Terms
Term Description
our Company, the Company,
the Issuer or HCG
HealthCare Global Enterprises Limited, a company incorporated under the Companies
Act, 1956 and having its Registered Office at HCG Tower, No. 8, P Kalinga Rao
Road, Sampangi Rama Nagar, Bengaluru 560 027, Karnataka, India
we, us or our Unless the context otherwise indicates or implies, refers to our Company together with
its Subsidiaries and LLPs
Company Related Terms
Term Description
AOPL Aastha Oncology Private Limited, a company incorporated under the Companies Act,
1956 and having its registered office at 1, Maharasthra Society, Near Mithakali Six
Road, Ellisbridge, Ahmedabad 380 006, Gujarat, India
APEX HCG LLP APEX HCG Oncology Hospitals LLP
Articles of Association/AoA Articles of Association of our Company, as amended
Auditors/Statutory Auditors Statutory auditors of our Company, namely, Deloitte Haskins & Sells, Chartered
Accountants
BACC Healthcare BACC Health Care Private Limited
BCCHI The Bharath Charitable Cancer Hospital and Institute (Private Charitable Trust)
BMORCL Banashankari Medical and Oncology Research Centre Private Limited
Board/Board of Directors Board of Directors of our Company or a duly constituted committee thereof
Corporate Office Corporate office of our Company located at Tower Block, Unity Building Complex,
No. 3, Mission Road, Bengaluru 560 027, Karnataka, India
Director(s) Director(s) of our Company
DKR Healthcare DKR Healthcare Private Limited
Equity Shares Equity Shares of our Company of face value of `10 each
ESOP 2010 Employee Stock Option Scheme 2010
ESOP 2014 Employee Stock Option Scheme 2014
Evolvence Evolvence India Life Sciences Fund LLC
GMH LLP Gutti Malnad Hospital LLP
Group Entities Companies, firms, ventures, etc. promoted by our Promoters, irrespective of whether
or not such entities are covered under Section 370(1B) of the Companies Act.
For details, see Our Group Entities on page 214
HCG Africa HealthCare Global (Africa) Pvt. Ltd.
HCG Diwan Chand LLP HealthCare Diwan Chand Imaging LLP
HCG EKO LLP HCG EKO Oncology LLP
HCG Kenya HealthCare Global (Kenya) Private Limited
HCG Mauritius HCG (Mauritius) Pvt. Ltd.
HCG Medi-Surge HCG Medi-Surge Hospitals Private Limited
HCG NCHRI LLP HCG NCHRI Oncology LLP
HCG Pinnacle HCG Pinnacle Oncology Private Limited
HCG Regency HCG Regency Oncology Healthcare Private Limited
HCG Senthil HealthCare Global Senthil Multi Specialty Hospitals Private Limited
HCG Tanzania HealthCare Global (Tanzania) Private Limited
HCG TVH HCG TVH Medical Imaging Private Limited
HCG Uganda HealthCare Global (Uganda) Private Limited
HCG Vijay HealthCare Global Vijay Oncology Private Limited
HMS HCG Multi-Specialty Hospital
IHDUA International Human Development and Upliftment Academy (Private Trust)
KDCPL Kruti Designers and Contractors Private Limited
Key Management Personnel Key management personnel of our Company in terms of Regulation 2(1)(s) of the
SEBI ICDR Regulations, Section 2(51) of the Companies Act, 2013 and as disclosed
3
Term Description
in Our Management on page 193
LLPs Limited Liability Partnership firms in which our Company is a partner, namely:
1. APEX HCG LLP 2. HCG Diwan Chand LLP 3. HCG EKO LLP 4. HCG NCHRI LLP 5. HCG Oncology LLP 6. Strand-Triesta LLP
Malnad Hospital Malnad Hospital and Institute of Oncology Private Limited
Malnad LLP Malnad Hi Tech Diagnostic Centre LLP
MAT Milestone Army Trust, an Indian trust, having its principal office at Tower A-602, 6th
floor, Express Zone, Western Express Highway, opposite Oberoi Mall, Malad East,
Mumbai, Maharashtra, India of which Shachindra Nath is the trustee
Memorandum of
Association/MOA
Memorandum of Association of our Company, as amended
MIMS HCG MIMS HCG Oncology Private Limited
MPEF Milestone Private Equity Fund, an Indian trust, registered with SEBI as a venture
capital fund having its principal office at Tower A-602, 6th floor, Express Zone,
Western Express Highway, opposite Oberoi Mall, Malad East, Mumbai, Maharashtra,
India, through its scheme namely India Build-Out Fund-I of which IL&FS Trust
Company Limited is the trustee
NTICPL Napean Trading and Investment Company Private Limited
PIOF PI Opportunities Fund I, a venture capital fund registered under the SEBI VCF Regulations and having its principal office at No. 5 Janmabhoomi Marg, Fort,
Mumbai, Maharashtra, India
Promoter Promoters of our Company, namely, Dr. BS Ajai Kumar, Dr. Ganesh Nayak, Dr. BS
Ramesh, Dr. KS Gopinath and Dr. M Gopichand
For details, see Our Promoters on page 210
Promoter Group Persons and entities constituting the promoter group of our Company in terms of
Regulation 2(1)(zb) of the SEBI ICDR Regulations
Registered Office Registered office of our Company located at HCG Tower, No. 8, P Kalinga Rao Road,
Sampangi Rama Nagar, Bengaluru 560 027, Karnataka, India
Registrar of Companies/RoC Registrar of Companies, Bangalore situated at Karnataka, India
Restated Consolidated Financial
Statements
The restated audited consolidated financial information of our Company, Subsidiaries
and associates which comprises of the restated audited consolidated balance sheet, the
restated audited consolidated profit and loss information and the restated audited
consolidated cash flow information as at and for the financial years ended March 31,
2015, March 31, 2014, March 31, 2013, March 31, 2012 and March 31, 2011, together
with the annexures and notes thereto
Restated Financial Statements Collectively, the Restated Consolidated Financial Statements and the Restated
Standalone Financial Statements
Restated Standalone Financial
Statements
The restated audited standalone financial information of our Company which
comprises of the restated audited standalone balance sheet, the restated audited
standalone profit and loss information and the restated audited standalone cash flow
information as at and for the financial years ended March 31, 2015, March 31, 2014,
March 31, 2013, March 31, 2012 and March 31, 2011, together with the annexures and
notes thereto
Shareholders Shareholders of our Company from time to time
SSDURCPL Sada Sharada Diagnostic Urology and Rehabilitation Centre Private Limited
SSHDUA Sada Sharada Human Development and Upliftment Academy
SSTRI Sada Sharada Tumour and Research Institute
Strand-Triesta LLP Strand-Triesta Cancer Genomics LLP
Subsidiaries or individually
known as Subsidiary
Subsidiaries of our Company namely:
1. BACC Healthcare 2. DKR Healthcare 3. HCG Medi-Surge 4. HCG Pinnacle 5. HCG Regency 6. HCG TVH 7. HCG Africa 8. HCG Mauritius 9. HCG Kenya 10. HCG Tanzania 11. HCG Uganda
4
Term Description
12. HCG Senthil 13. Malnad Hospital 14. MIMS HCG
Ubiquitous Ubiquitous Oncoreach LLP
V-Sciences V-Sciences Investments Pte Ltd, a company incorporated under the laws of Singapore
and having its registered office at 60B, Orchard Road, #06-18, Tower 2, The
Atrium@Orchard, Singapore
Offer Related Terms
Term Description
Allot/Allotment/Allotted Unless the context otherwise requires, allotment of the Equity Shares pursuant to the
Fresh Issue and transfer of the Equity Shares offered by the Selling Shareholders
pursuant to the Offer for Sale to the successful Bidders
Allotment Advice Note or advice or intimation of Allotment sent to the Bidders who have been or are to
be Allotted the Equity Shares after the Basis of Allotment has been approved by the
Designated Stock Exchange
Allottee A successful Bidder to whom the Equity Shares are Allotted
Anchor Investor A Qualified Institutional Buyer, applying under the Anchor Investor Portion in
accordance with the requirements specified in the SEBI ICDR Regulations
Anchor Investor Allocation Price The price at which Equity Shares will be allocated to Anchor Investors in terms of the
Red Herring Prospectus and the Prospectus which will be decided by our Company, in
consultation with the Investor Selling Shareholders and the BRLMs
Anchor Investor Bid/Offer Period The day, one Working Day prior to the Bid/Offer Opening Date, on which Bids by
Anchor Investors shall be submitted
Anchor Investor Offer Price Final price at which the Equity Shares will be Allotted to Anchor Investors in terms of
the Red Herring Prospectus and the Prospectus, which price will be equal to or higher
than the Offer Price but not higher than the Cap Price
The Anchor Investor Offer Price will be decided by our Company in consultation with
the Investor Selling Shareholders and the BRLMs
Anchor Investor Portion Up to 60% of the QIB Portion which may be allocated by our Company in
consultation with the Investor Selling Shareholders and the BRLMs, to Anchor
Investors on a discretionary basis
One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds,
subject to valid Bids being received from domestic Mutual Funds at or above the
Anchor Investor Allocation Price
Application Supported by
Blocked Amount or ASBA
An application, whether physical or electronic, used by Bidders, other than Anchor
Investors, to make a Bid authorising an SCSB to block the Bid Amount in the ASBA
Account
ASBA is mandatory for QIBs (except Anchor Investors) and Non Institutional Bidders
participating in the Offer
ASBA Account An account maintained with an SCSB and specified in the Bid cum Application Form
submitted by ASBA Bidders for blocking the Bid Amount mentioned in the Bid cum
Application Form
ASBA Bid A Bid made by an ASBA Bidder
ASBA Bidder Prospective investors (other than Anchor Investors) in the Offer who intend to submit
their Bid through the ASBA process
Banker(s) to the Offer/Escrow
Collection Bank(s)
Banks which are clearing members and registered with SEBI as bankers to an issue
and with whom the Escrow Account will be opened, in this case being []
Basis of Allotment Basis on which Equity Shares will be Allotted to successful Bidders under the Offer
and which is described in Offer Procedure on page 319
Bid An indication to make an offer during the Bid/Offer Period by a Bidder pursuant to
submission of the Bid cum Application Form, or during the Anchor Investor Bid/Offer
Period by the Anchor Investors, to subscribe to or purchase the Equity Shares of our
Company at a price within the Price Band, including all revisions and modifications
thereto as permitted under the SEBI ICDR Regulations
The term Bidding shall be construed accordingly
Bid Amount The highest value of optional Bids indicated in the Bid cum Application Form and
payable by the Bidder upon submission of the Bid
Bid cum Application Form The form used by a Bidder, including an ASBA Bidder, to make a Bid and which will
be considered as the application for Allotment or transfer, as the case may be, in terms
5
Term Description
of the Red Herring Prospectus and the Prospectus
Bid Lot []
Bid/Offer Closing Date Except in relation to any Bids received from the Anchor Investors, the date after which
the Syndicate, the Designated Branches and the Registered Brokers will not accept any
Bids, which shall be notified in two national daily newspapers, one each in English
and Hindi, and in one Kannada daily newspaper, each with wide circulation
Our Company may, in consultation with the Investor Selling Shareholders and the
BRLMs, consider closing the Bid/Offer Period for QIBs one Working Day prior to the
Bid/Offer Closing Date in accordance with the SEBI ICDR Regulations
Bid/Offer Opening Date Except in relation to any Bids received from the Anchor Investors, the date on which
the Syndicate, the Designated Branches and the Registered Brokers shall start
accepting Bids, which shall be notified in two national daily newspapers, one each in
English and Hindi, and in one Kannada daily newspaper, each with wide circulation
Bid/Offer Period Except in relation to Anchor Investors, the period between the Bid/Offer Opening
Date and the Bid/Offer Closing Date, inclusive of both days, during which prospective
Bidders can submit their Bids, including any revisions thereof
Bidder Any prospective investor who makes a Bid pursuant to the terms of the Red Herring
Prospectus and the Bid cum Application Form and unless otherwise stated or implied,
includes an ASBA Bidder and Anchor Investor
Book Building Process Book building process, as provided in Schedule XI of the SEBI ICDR Regulations, in
terms of which the Offer is being made
Book Running Lead Managers or
BRLMs
The book running lead managers to the Offer namely, Kotak Mahindra Capital
Company Limited, Edelweiss Financial Services Limited, Goldman Sachs (India)
Securities Private Limited, IDFC Securities Limited, IIFL Holdings Limited and Yes
Bank Limited
Broker Centres Broker centres notified by the Stock Exchanges where Bidders can submit the Bid
cum Application Forms to a Registered Broker
The details of such Broker Centres, along with the names and contact details of the
Registered Broker are available on the respective websites of the Stock Exchanges
(www.bseindia.com and www.nseindia.com)
CAN/Confirmation of Allocation
Note
Notice or intimation of allocation of the Equity Shares sent to Anchor Investors, who
have been allocated the Equity Shares, after the Anchor Investor Bid/Offer Period
Cap Price The higher end of the Price Band, above which the Offer Price will not be finalised
and above which no Bids will be accepted
Client ID Client identification number maintained with one of the Depositories in relation to
demat account
Cut-off Price Offer Price, finalised by our Company in consultation with the Investor Selling
Shareholders and the BRLMs
Only Retail Individual Bidders are entitled to Bid at the Cut-off Price. QIBs and Non-
Institutional Bidders are not entitled to Bid at the Cut-off Price
Designated Branches Such branches of the SCSBs which shall collect the Bid cum Application Forms used
by the ASBA Bidders, a list of which is available on the website of SEBI at
http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries or at
such other website as may be prescribed by SEBI from time to time
Designated Date The date on which the Escrow Collection Banks transfer funds from the Escrow
Accounts, and the SCSBs issue instructions for transfer of funds from the ASBA
Accounts, to the Public Issue Account or the Refund Account, as appropriate, in terms
of the Red Herring Prospectus following which the Board of Directors may Allot
Equity Shares to successful Bidders/Applicants in the Fresh Issue and the Selling
Shareholders may give delivery instructions for the transfer of the Equity Shares
constituting the Offer for Sale Designated Stock Exchange []
Draft Red Herring Prospectus or
DRHP
This Draft Red Herring Prospectus dated July 24, 2015, issued in accordance with the
SEBI ICDR Regulations, which does not contain complete particulars of the price at
which the Equity Shares will be Allotted and the size of the Offer
Edelweiss Edelweiss Financial Services Limited
Eligible NRI(s) NRI(s) from jurisdictions outside India where it is not unlawful to make an offer or
invitation under the Offer and in relation to whom the Bid cum Application Form and
the Red Herring Prospectus will constitute an invitation to subscribe to or to purchase
the Equity Shares
Escrow Account Account opened with the Escrow Collection Bank(s) and in whose favour the Bidders
(excluding the ASBA Bidders) will issue cheques or drafts in respect of the Bid
6
Term Description
Amount when submitting a Bid
Escrow Agent Escrow agent appointed pursuant to the Share Escrow Agreement, namely, Karvy
Computershare Private Limited
Escrow Agreement Agreement dated [] entered into by our Company, the Selling Shareholders, the
Registrar to the Offer, the BRLMs, the Syndicate Members, the Escrow Collection
Bank(s) and the Refund Bank(s) for collection of the Bid Amounts and where
applicable, refunds of the amounts collected from the Bidders (excluding the ASBA
Bidders), on the terms and conditions thereof
First Bidder Bidder whose name shall be mentioned in the Bid cum Application Form or the
Revision Form and in case of joint Bids, whose name shall also appear as the first
holder of the beneficiary account held in joint names
Floor Price The lower end of the Price Band, subject to any revision thereto, at or above which the
Offer Price and the Anchor Investor Offer Price will be finalised and below which no
Bids will be accepted
Fresh Issue The fresh issue of up to 11,600,000 Equity Shares aggregating up to `[] million by
our Company
General Information
Document/GID
The General Information Document for investing in public issues prepared and issued
in accordance with the circular (CIR/CFD/DIL/12/2013) dated October 23, 2013
notified by SEBI, suitably modified and included in Offer Procedure on page 319
GS Goldman Sachs (India) Securities Private Limited
IDFC IDFC Securities Limited
IIFL IIFL Holdings Limited
Investor Share Escrow Agreement Agreement dated [] entered into by our Company, Dr. BS Ajai Kumar, Gangadhara
Ganapati, Investor Selling Shareholders, the Escrow Agent, in connection with the
transfer of Equity Shares under the Offer for Sale by such Selling Shareholders and
credit of such Equity Shares to the demat account of the Allottees
Investor Selling Shareholders MAT, MPEF, PIOF, V-Sciences
Kotak Kotak Mahindra Capital Company Limited
Maximum RIB Allottees Maximum number of RIBs who can be allotted the minimum Bid Lot. This is
computed by dividing the total number of Equity Shares available for Allotment to
RIBs by the minimum Bid Lot
Mutual Fund Portion 5% of the QIB Portion (excluding the Anchor Investor Portion), or 466,470 Equity
Shares which shall be available for allocation to Mutual Funds only
Mutual Funds Mutual funds registered with SEBI under the Securities and Exchange Board of India
(Mutual Funds) Regulations, 1996
Net Proceeds Proceeds of the Fresh Issue less our Companys share of the Offer expenses
For further information about use of the Offer Proceeds and the Offer expenses, see
Objects of the Offer on page 110
Non-Institutional Bidders All Bidders that are not QIBs or Retail Individual Bidders and who have Bid for
Equity Shares for an amount more than `200,000 (but not including NRIs other than
Eligible NRIs)
Non-Institutional Portion The portion of the Offer being not more than 15% of the Offer consisting of 4,664,700
Equity Shares which shall be available for allocation on a proportionate basis to Non-
Institutional Bidders, subject to valid Bids being received at or above the Offer Price
Non-Resident A person resident outside India, as defined under FEMA and includes a non resident
Indian, FIIs and FPIs
Offer The public issue of up to 31,098,000 Equity Shares of face value of `10 each for cash
at a price of `[] each, aggregating up to `[] million comprising the Fresh Issue and
the Offer for Sale
Offer Agreement The agreement dated July 24, 2015 between our Company, the Selling Shareholders
and the BRLMs, pursuant to which certain arrangements are agreed to in relation to
the Offer
Offer for Sale The offer for sale of up to 19,498,000 Equity Shares by Selling Shareholders at the
Offer Price aggregating up to `[] million in terms of the Red Herring Prospectus
Offer Price The final price at which Equity Shares will be Allotted in terms of the Red Herring
Prospectus
The Offer Price will be decided by our Company in consultation with the Investor
Selling Shareholders and the BRLMs on the Pricing Date
Offer Proceeds The proceeds of the Offer that is available to our Company and the Selling
Shareholders
Other Selling Shareholders 1. AOPL 2. Dr. BS Ajai Kumar
7
Term Description
3. Dr. G Kilara 4. Dr. K Harish jointly with Shubha Harish 5. Dr. Nalini Kilara 6. Ganga Ramaiah 7. Gangadhara Ganapati 8. Rajesh Ramaiah 9. Shubha Harish jointly with Dr. K Harish
Price Band Price band of a minimum price of `[] per Equity Share (Floor Price) and the
maximum price of `[] per Equity Share (Cap Price) including revisions thereof
The Price Band and the minimum Bid Lot size for the Offer will be decided by our
Company and the Investor Selling Shareholders in consultation with the BRLMs and
will be advertised, at least five Working Days prior to the Bid/Offer Opening Date, in
[] edition of the English national newspaper [], [] edition of the Hindi national
newspaper [], and [] edition of the Kannada newspaper [], each with wide
circulation
Pricing Date The date on which our Company in consultation with the Investor Selling
Shareholders and the BRLMs, will finalise the Offer Price
Prospectus The Prospectus to be filed with the RoC after the Pricing Date in accordance with
Section 26 of the Companies Act, 2013, and the SEBI ICDR Regulations containing,
inter alia, the Offer Price that is determined at the end of the Book Building Process,
the size of the Offer and certain other information
Public Issue Account Account opened with the Bankers to the Offer under Section 40(3) of the Companies
Act, 2013 to receive monies from the Escrow Account(s) and ASBA Accounts on the
Designated Date
QIB Category/QIB Portion The portion of the Offer (including the Anchor Investor Portion) being at least 75% of
the Offer consisting of 23,323,500 Equity Shares which shall be Allotted to QIBs
(including Anchor Investors)
Qualified Institutional Buyers or
QIBs
Qualified institutional buyers as defined under Regulation 2(1)(zd) of the SEBI ICDR
Regulations
Red Herring Prospectus or RHP The Red Herring Prospectus to be issued in accordance with Section 32 of the
Companies Act, 2013 and the provisions of the SEBI ICDR Regulations, which will
not have complete particulars of the price at which the Equity Shares will be offered
and the size of the Offer including any addenda or corrigenda thereto
The Red Herring Prospectus will be registered with the RoC at least three days before
the Bid/Offer Opening Date and will become the Prospectus upon filing with the RoC
after the Pricing Date
Refund Account(s) The account opened with the Refund Bank(s), from which refunds, if any, of the
whole or part of the Bid Amount (excluding refund to ASBA Bidders) shall be made
Refund Bank(s) []
Refunds through electronic
transfer of funds
Refunds through NECS, direct credit, RTGS or NEFT, as applicable
Registered Brokers Stock brokers registered with the stock exchanges having nationwide terminals, other
than the Members of the Syndicate and eligible to procure Bids in terms of Circular
No. CIR/CFD/14/2012 dated October 4, 2012 issued by SEBI
Registrar to the Offer/Registrar Karvy Computershare Private Limited
Retail Individual Bidder(s)/Retail
Individual Investor(s)/RII(s)
Individual Bidders submitting Bids, who have Bid for the Equity Shares for an amount
not more than `200,000 in any of the bidding options in the Offer (including HUFs
applying through their Karta and Eligible NRIs and does not include NRIs other than
Eligible NRIs)
Retail Portion The portion of the Offer being not more than 10% of the Offer consisting of 3,109,800
Equity Shares which shall be available for allocation to Retail Individual Bidders) in
accordance with the SEBI ICDR Regulations
Revision Form Form used by the Bidders, including ASBA Bidders, to modify the quantity of the
Equity Shares or the Bid Amount in any of their Bid cum Application Forms or any
previous Revision Form(s)
QIB Bidders and Non-Institutional Bidders are not allowed to lower their Bids (in
terms of quantity of Equity Shares or the Bid Amount) at any stage
Self Certified Syndicate Bank(s)
or SCSB(s)
The banks registered with SEBI, offering services in relation to ASBA, a list of which
is available on the website of SEBI at
http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries and
updated from time to time
8
Term Description
Selling Shareholders Investor Selling Shareholders and Other Selling Shareholders offering Equity Shares
in the Offer for Sale
Share Escrow Agreement Agreement dated July 17, 2015 entered into by AOPL, Dr. G Kilara, Dr. K Harish,
Shubha Harish, Dr. Nalini Kilara, Ganga Ramaiah, Rajesh Ramaiah, our Company
and the Escrow Agent in connection with the transfer of Equity Shares under the Offer
for Sale by such Selling Shareholders and credit of such Equity Shares to the demat
account of the Allottees
Specified Locations Bidding centres where the Syndicate shall accept Bid cum Application Forms from
ASBA Bidders, a list of which is available on the website of SEBI (www.sebi.gov.in)
and updated from time to time
Syndicate Agreement Agreement to be entered into among the BRLMs, the Syndicate Members, our
Company and the Selling Shareholders in relation to the collection of Bids in the Offer
(other than Bids directly submitted to the SCSBs under the ASBA process and Bids
submitted to Registered Brokers at the Broker Centres)
Syndicate Members Intermediaries registered with SEBI who are permitted to carry out activities as an
underwriter, namely, []
Syndicate or Members of the
Syndicate
The BRLMs and the Syndicate Members
TRS or Transaction Registration
Slip
The slip or document issued by the Syndicate, or the SCSB (only on demand), as the
case may be, to the Bidder as proof of registration of the Bid
Underwriters []
Underwriting Agreement The agreement among the Underwriters, our Company and the Selling Shareholders to
be entered into on or after the Pricing Date
Working Day Any day, other than Saturdays and Sundays, on which commercial banks in Mumbai
are open for business, provided however, for the purpose of the time period between
the Bid/Offer Closing Date and listing of the Equity Shares on the Stock Exchanges,
Working Days shall mean all days excluding Sundays and bank holidays in Delhi or
Mumbai in accordance with the SEBI circular no. CIR/CFD/DIL/3/2010 dated April
22, 2010
Yes Bank Yes Bank Limited
Technical/Industry Related Terms/Abbreviations
Term Description
3D-CRT 3D-Conformal Radiation Therapy
CAP College of American Pathologists
CDC CDC Group plc
CT Computed Tomography
DNA Deoxyribo Nucleic Acid
EMR Electronic Medical Record
ERP Enterprise resource planning
FDG Fludeoxyglucose
GIPSA The General Insurers (Public Sector) Association of India
HIS Hospital Information Systems
IBEF India Brand Equity Foundation
ICSI Intracyctoplasmic Sperm Injection
ICU Intensive Care Unit
IGRT Image Guided Radiation Therapy
IMRT Intensity-Modulated Radiation Therapy
IUI Intrauterine Insemination
IVF In Vitro Fertilisation
LINAC Linear Accelerator
MBBS Bachelor of Medicine, Bachelor of Surgery
MRI Magnetic Resonance Imaging
NABH National Accreditation Board for Hospitals and Healthcare Providers
NABL National Accreditation Board for Testing and Calibration Laboratories
NMR Nuclear Magnetic Resonance
PACS Picture Archiving and Communication System
PCOS Poly-Cystic Ovarian Syndrome
PCR Polymerase Chain Reaction
PET-CT Positron Emission TomographyComputed Tomography
RIS Radiology Information System
RNA Ribonucleic Acid
SRS Stereotactic Radiosurgery
9
Term Description
SRT Stereotactic Radiotherapy
WBRRS Whole Body Robotic Radiosurgery
Conventional and General Terms or Abbreviations
Term Description
`/Rs./Rupees/INR Indian Rupees
AERB Atomic Energy Regulatory Board
AGM Annual General Meeting
AIF Alternative Investment Fund as defined in and registered with SEBI under the
Securities and Exchange Board of India (Alternative Investments Funds) Regulations,
2012
Air Act Air (Prevention and Control of Pollution) Act, 1981
ART Bill The Assisted Reproductive Technologies (Regulation) Bill of 2013
ART Guidelines The Assisted Reproductive Technologies Guidelines
AS/Accounting Standards Accounting Standards issued by the Institute of Chartered Accountants of India
Atomic Energy Act Atomic Energy Act, 1962
Atomic Energy Rules Atomic Energy (Radiation Protection) Rules, 2004
BMW Rules Bio-Medical Waste (Management and Handling) Rules, 1998
Bn/bn Billion
BSE BSE Limited
CAGR Compounded Annual Growth Rate
Category I Foreign Portfolio
Investors
FPIs who are registered as Category I foreign portfolio investors under the SEBI FPI
Regulations
Category II Foreign Portfolio
Investors
FPIs who are registered as Category II foreign portfolio investors under the SEBI
FPI Regulations
Category III Foreign Portfolio
Investors
FPIs who are registered as Category III foreign portfolio investors under the SEBI
FPI Regulations
CCI Competition Commission of India
CDSL Central Depository Services (India) Limited
CENVAT Central Value Added Tax
CESTAT Customs, Excise and Service Tax Appellate Tribunal
CIN Corporate Identity Number
CIT Commissioner of Income Tax
Civil Code The Code of Civil Procedure, 1908
Companies Act Companies Act, 1956 and Companies Act, 2013, as applicable
Companies Act, 1956 Companies Act, 1956 (without reference to the provisions thereof that have ceased to
have effect upon notification of the sections of the Companies Act, 2013) along with
the relevant rules made thereunder
Companies Act, 2013 Companies Act, 2013, to the extent in force pursuant to the notification of the Notified
Sections, along with the relevant rules made thereunder
Competition Act The Competition Act, 2002
Customs Act The Customs Act, 1962
DCA Drugs and Cosmetics Act, 1940
DCA Rules Drugs and Cosmetics Rules, 1945
Depositories NSDL and CDSL
Depositories Act The Depositories Act, 1996
DIN Director Identification Number
DP ID Depository Participants Identification
DP/Depository Participant A depository participant as defined under the Depositories Act
DTC Direct Taxes Code
EGM Extraordinary General Meeting
EPA Environment Protection Act, 1986
EPCG Scheme The Export Promotion Capital Goods Scheme
EPS Earnings Per Share
Equity Listing Agreement Listing Agreement to be entered into with the Stock Exchanges on which the Equity
Shares of our Company are to be listed
ESI Act Employees State Insurance Act, 1948
FCNR Foreign Currency Non-Resident
FDI Foreign Direct Investment
FEMA Foreign Exchange Management Act, 1999, read with rules and regulations thereunder
FEMA Regulations FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations,
2000 and amendments thereto
10
Term Description
FII(s) Foreign Institutional Investors as defined under the SEBI FPI Regulations
Financial Year/Fiscal/ Fiscal
Year/FY
Unless stated otherwise, the period of 12 months ending March 31 of that particular
year
FIPB Foreign Investment Promotion Board
FPI(s) Foreign Portfolio Investors as defined under the SEBI FPI Regulations
FVCI Foreign Venture Capital Investors as defined and registered under the SEBI FVCI
Regulations
GDP Gross Domestic Product
GIR General Index Register
GoI/Government Government of India
GST Goods and Services Tax
Hazardous Waste Rules, HMW
Rules
Hazardous Waste (Management, Handling and Transboundary Movement) Rules,
2008
ICAI The Institute of Chartered Accountants of India
ICDS Income Computation and Disclosure Standards notified by the Ministry of Finance on
March 31, 2015
IFRS International Financial Reporting Standards
IMCA Indian Medical Council Act, 1956
IMDA Indian Medical Degree Act, 1916
Income Tax Act The Income Tax Act, 1961
India Republic of India
Indian Accounting Standard
Rules
The Companies (Indian Accounting Standards) Rules of 2015
Indian GAAP Generally Accepted Accounting Principles in India
IPO Initial public offering
IRDA Insurance Regulatory and Development Authority of India
IST Indian Standard Time
IT Information Technology
Legal Metrology Act Legal Metrology Act, 2009
LLP Act Limited Liability Partnership Act, 2008
MCA Ministry of Corporate Affairs, Government of India
Mn/mn Million
MTP Act Medical Termination of Pregnancy Act, 1971
N.A./NA Not Applicable
Narcotic Act Narcotic Drugs and Psychotropic Substances Act, 1985
NAV Net Asset Value
NBFC Non-banking financial company registered with the RBI
NECS National Electronic Clearing Services
NEFT National Electronic Fund Transfer
Notified Sections The sections of the Companies Act, 2013 that were notified by the Ministry of
Corporate Affairs, Government of India
NR Non-resident
NRE Account Non Resident External Account
NRI A person resident outside India, who is a citizen of India or a person of Indian origin,
and shall have the meaning ascribed to such term in the Foreign Exchange
Management (Deposit) Regulations, 2000
NRO Account Non Resident Ordinary Account
NSDL National Securities Depository Limited
NSE The National Stock Exchange of India Limited
OCB/Overseas Corporate Body A company, partnership, society or other corporate body owned directly or indirectly
to the extent of at least 60% by NRIs including overseas trusts, in which not less than
60% of beneficial interest is irrevocably held by NRIs directly or indirectly and which
was in existence on October 3, 2003 and immediately before such date had taken
benefits under the general permission granted to OCBs under FEMA. OCBs are not
allowed to invest in the Offer
p.a. Per annum
P/E Ratio Price/Earnings Ratio
PAN Permanent Account Number
PAT Profit After Tax
Pharmacy Act Pharmacy Act, 1948
PNDT Act Pre-Conception and Pre-Natal Diagnostic Techniques (Prohibition of Sex Selection)
Act, 1994
Radiation Rules Radiation Protection Rules, 1971
11
Term Description
Radiation Surveillance Procedure Radiation Surveillance Procedures for Medical Application of Radiation, 1989
Radioactive Waste Rules Atomic Energy (Safe Disposal of Radioactice Waste) Rules, 1987
RBI Reserve Bank of India
RoC Registrar of Companies, Bangalore
RTGS Real Time Gross Settlement
SCRA Securities Contracts (Regulation) Act, 1956
SCRR Securities Contracts (Regulation) Rules, 1957
SEBI Securities and Exchange Board of India constituted under the SEBI Act, 1992
SEBI Act Securities and Exchange Board of India Act 1992
SEBI AIF Regulations Securities and Exchange Board of India (Alternative Investments Funds) Regulations,
2012
SEBI Depository Regulations Securities and Exchange Board of India (Depositories and Participants) Regulations,
1996
SEBI FII Regulations Securities and Exchange Board of India (Foreign Institutional Investors) Regulations,
1995
SEBI FPI Regulations Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations,
2014
SEBI FVCI Regulations Securities and Exchange Board of India (Foreign Venture Capital Investors)
Regulations, 2000
SEBI ICDR Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009
SEBI Mutual Fund Regulations Securities and Exchange Board of India (Mutual Funds) Regulations, 1996
SEBI Portfolio Manager
Regulations
Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993
SEBI Stock Broker Regulations Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations,
1992
SEBI VCF Regulations Securities and Exchange Board of India (Venture Capital Fund) Regulations, 1996
Securities Act U.S. Securities Act, 1933
SICA Sick Industrial Companies (Special Provisions) Act, 1985
Sq. ft./sq.ft. Square feet
Stamp Act The Indian Stamp Act, 1899
State Government The government of a state in India
Stock Exchanges The BSE and the NSE
STT Securities Transaction Tax
Takeover Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011
TAN Tax deduction account number
Transplantation of Organs Act Transplantation of Human Organs Act, 1994
U.S./USA/United States United States of America
ULIP Unit-linked insurance plan
US GAAP Generally Accepted Accounting Principles in the United States of America
USD/US$ United States Dollars
VAS Value Added Services
VAT Value Added Tax
VCFs Venture Capital Funds as defined in and registered with SEBI under the SEBI VCF
Regulations
Water Act Water (Prevention and Control of Pollution) Act, 1974
X-Ray Safety Code The Safety Code for Medical Diagnostic X-Ray Equipment and Installations, 2001
The words and expressions used but not defined herein shall have the same meaning as is assigned to such terms
under the SEBI ICDR Regulations, the Companies Act, the SCRA, the Depositories Act and the rules and
regulations made thereunder.
Notwithstanding the foregoing, terms in Statement of Tax Benefits, Financial Statements and Main
Provisions of Articles of Association on pages 121, F-1 and 373, respectively, shall have the meaning given to
such terms in such sections.
12
PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA
Certain Conventions
All references in this Draft Red Herring Prospectus to India are to the Republic of India, all references to
Kenya are to the Republic of Kenya, all references to Mauritius are to the Republic of Mauritius, all
references to Tanzania are to the United Republic of Tanzania, all references Uganda are to the Republic of
Uganda and all references to USA, US and United States are to the United States of America.
Unless stated otherwise, all references to page numbers in this Draft Red Herring Prospectus are to the page
numbers of this Draft Red Herring Prospectus.
Financial Data
Unless stated otherwise, the financial data in this Draft Red Herring Prospectus is derived from the Restated
Financial Statements prepared in accordance with the Companies Act and Indian GAAP, and restated in
accordance with the SEBI ICDR Regulations.
In this Draft Red Herring Prospectus, any discrepancies in any table between the total and the sums of the
amounts listed are due to rounding off. All figures in decimals have been rounded off to the second decimal and
all percentage figures have been rounded off to two decimal places and accordingly there may be consequential
changes in this Draft Red Herring Prospectus.
Our Companys financial year commences on April 1 and ends on March 31 of the next year; accordingly, all
references to a particular financial year, unless stated otherwise, are to the 12 month period ended on March 31
of that year.
There are significant differences between Indian GAAP, US GAAP and IFRS. Our Company does not provide
reconciliation of the financial information included in this Draft Red Herring Prospectus to IFRS or US GAAP.
Our Company has not attempted to explain those differences or quantify their impact on the financial data
included in this Draft Red Herring Prospectus and it is urged that you consult your own advisors regarding such
differences and their impact on financial data included in this Draft Red Herring Prospectus. For details in
connection with risks involving differences between Indian GAAP and IFRS, see Risk Factors on page 16.
Accordingly, the degree to which the financial information included in this Draft Red Herring Prospectus will
provide meaningful information is entirely dependent on the readers level of familiarity with Indian accounting
policies and practices, the Companies Act and the SEBI ICDR Regulations. Any reliance by persons not
familiar with Indian accounting policies and practices on the financial disclosures presented in this Draft Red
Herring Prospectus should accordingly be limited.
Unless the context otherwise indicates, any percentage amounts, as set forth in Risk Factors, Our Business
and Managements Discussion and Analysis of Financial Conditions and Results of Operations on pages 16,
147 and 254 respectively, and elsewhere in this Draft Red Herring Prospectus have been calculated on the basis
of the Restated Financial Statements of our Company prepared in accordance with the Companies Act and
Indian GAAP and restated in accordance with the SEBI ICDR Regulations.
EBIDTA presented in this Draft Red Herring Prospectus are supplemental measures of our performance and
liquidity that are not required by, or presented in accordance with, Indian GAAP, IFRS or US GAAP.
Furthermore, EBIDTA is not a measurement of our financial performance or liquidity under Indian GAAP,
IFRS or US GAAP and should not be considered as an alternative to net profit/loss, revenue from operations or
any other performance measures derived in accordance with Indian GAAP, IFRS or US GAAP or as an
alternative to cash flow from operations or as a measure of our liquidity. In addition, EBITDA is not a
standardised term, hence a direct comparison of EBITDA between companies may not be possible. Other
companies may calculate EBITDA differently from us, limiting its usefulness as a comparative measure.
Currency and Units of Presentation
All references to:
KES are to the Kenyan Shilling, the official currency of the Republic of Kenya;
MUR or are to the Mauritian Rupee, the official currency of the Republic of Mauritius;
Rupees or ` or INR or Rs. are to the Indian Rupee, the official currency of the Republic of India;
TZS are to the Tanzanian Shilling, the official currency of the United Republic of Tanzania;
13
UGX are to the Ugandan Shilling, the official currency of the Republic of Uganda; and
USD or US$ are to United States Dollar, the official currency of the United States.
Our Company has presented certain numerical information in this Draft Red Herring Prospectus in million
units. One million represents 1,000,000 and one billion represents 1,000,000,000.
Exchange Rates
This Draft Red Herring Prospectus contains conversions of certain other currency amounts into Indian Rupees
that have been presented solely to comply with the SEBI ICDR Regulations. These conversions should not be
construed as a representation that these currency amounts could have been, or can be converted into Indian
Rupees, at any particular rate or at all.
The following table sets forth, for the periods indicated, information with respect to the exchange rate between
the Rupee and (i) the KES (in Rupees per KES); (ii) the MUR (in Rupees per MUR); (iii) the TZS (in Rupees per
TZS); (iv) the UGX (in Rupees per UGX); and (v) the USD (in Rupees per USD):
Currency As on March 31, 2013(1)
(`)
As on March 31, 2014(1)
(`)
As on March 31, 2015(1)
(`)
1 KES 0.64 0.69 0.67
1 MUR 1.75 1.99 1.71
1 TZS 0.03 0.04 0.04
1 UGX 0.02 0.02 0.02
1 USD 54.28 59.88 62.31 (Source: Bloomberg)
(1) In the event that March 31 of any of the respective years is a public holiday, the previous calendar day not being a public holiday has
been considered
Industry and Market Data
Unless stated otherwise, industry and market data used in this Draft Red Herring Prospectus has been obtained
or derived from publicly available information as well as industry publications and sources.
Industry publications generally state that the information contained in such publications has been obtained from
publicly available documents from various sources believed to be reliable but their accuracy and completeness
are not guaranteed and their reliability cannot be assured. Although we believe the industry and market data
used in this Draft Red Herring Prospectus is reliable, it has not been independently verified by us or the BRLMs
or any of their affiliates or advisors. The data used in these sources may have been reclassified by us for the
purposes of presentation. Data from these sources may also not be comparable. Such data involves risks,
uncertainties and numerous assumptions and is subject to change based on various factors, including those
discussed in Risk Factors on page 16. Accordingly, investment decisions should not be based solely on such
information.
In accordance with the SEBI ICDR Regulations, Basis for Offer Price on page 118 includes information
relating to our peer group companies. Such information has been derived from publicly available sources, and
neither we, nor the BRLMs have independently verified such information.
The extent to which the market and industry data used in this Draft Red Herring Prospectus is meaningful
depends on the readers familiarity with and understanding of the methodologies used in compiling such data.
There are no standard data gathering methodologies in the industry in which the business of our Company is
conducted, and methodologies and assumptions may vary widely among different industry sources.
Only statements and undertakings which are specifically confirmed or undertaken by the Investor Selling
Shareholders and Other Selling Shareholders, as the case may be, in this Draft Red Herring Prospectus shall
severally and not jointly deemed to be statements and undertakings made by such Selling Shareholders. All
other statements and/or undertakings in this Draft Red Herring Prospectus shall be statements and undertakings
made by our Company even if the same relates to the Selling Shareholder(s).
14
FORWARD-LOOKING STATEMENTS
This Draft Red Herring Prospectus contains certain forward-looking statements. These forward-looking
statements generally can be identified by words or phrases such as aim, anticipate, believe, expect,
estimate, intend, objective, plan, project, will, will continue, will pursue or other words or
phrases of similar import. Similarly, statements that describe our Companys strategies, objectives, plans or
goals are also forward-looking statements.
All forward-looking statements are subject to risks, uncertainties and assumptions about us that could cause
actual results to differ materially from those contemplated by the relevant forward-looking statement.
Actual results may differ materially from those suggested by the forward-looking statements due to risks or
uncertainties associated with the expectations with respect to, but not limited to, regulatory changes pertaining
to the industry in which our Company has businesses and its ability to respond to them, its ability to successfully
implement its strategy, its growth and expansion, technological changes, its exposure to market risks, general
economic and political conditions in India and globally which have an impact on its business activities or
investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest
rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in
India and globally, changes in laws, regulations and taxes and changes in competition in its industry. Important
factors that could cause actual results to differ materially from our Companys expectations include, but are not
limited to, the following:
reported net losses by our Company and some Subsidiaries in the recent Fiscal Years and their inability to achieve or sustain profitability in the future;
recurrence of incidents of fraud committed by employees and officers of our Subsidiaries;
unpredictability and variability of our results of operations year after year;
inability to successfully expand our HCG network and our Milann network or closing down of any of our existing centres;
inability to successfully execute our growth strategy;
outcome of the legal proceedings pending against our Promoters;
resignation of our specialist physicians or our inability to attract or retain such specialist physicians;
adverse economic, regulatory or other developments within Bengaluru, which may materially and adversely affect our centre of excellence in Bengaluru;
failure to receive payments on time from our payers; and
changes in government policies that relate to patients covered by government schemes.
For further discussion of factors that could cause the actual results to differ from the expectations, see Risk
Factors, Our Business and Managements Discussion and Analysis of Financial Condition and Results of
Operations on pages 16, 147 and 254, respectively. By their nature, certain market risk disclosures are only
estimates and could be materially different from what actually occurs in the future. As a result, actual gains or
losses could materially differ from those that have been estimated.
We cannot assure investors that the expectations reflected in these forward-looking statements will prove to be
correct. Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking
statements and not to regard such statements as a guarantee of future performance.
Forward-looking statements reflect the current views of our Company as of the date of this Draft Red Herring
Prospectus and are not a guarantee of future performance. These statements are based on the managements
beliefs and assumptions, which in turn are based on currently available information. Although we believe the
assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions
could prove to be inaccurate, and the forward-looking statements based on these assumptions could be incorrect.
Neither our Company, our Directors, the Investor Selling Shareholders, Other Selling Shareholders, the BRLMs
nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting
circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the
underlying assumptions do not come to fruition.
In accordance with SEBI requirements, our Company and the BRLMs will ensure that investors in India are
informed of material developments until the time of the grant of listing and trading permission by the Stock
Exchanges. The Investor Selling Shareholders and Other Selling Shareholders severally and not jointly will
ensure that investors are informed of material developments in relation to statements and undertakings made by
the Selling Shareholders in the Red Herring Prospectus and the Prospectus until the time of the grant of listing
15
and trading permission by the Stock Exchanges. Further, in accordance with Regulation 51A of the SEBI ICDR
Regulations, our Company may be required to undertake an annual updation of the disclosures made in this
Draft Red Herring Prospectus and make it publicly available in the manner specified by SEBI.
16
SECTION II: RISK FACTORS
An investment in our Equity Shares involves a high degree of risk. You should carefully consider all the
information in this Draft Red Herring Prospectus, including the risks and uncertainties described below, before
making an investment in our Equity Shares. If any one or a combination of the following risks actually occurs,
our business, prospects, financial condition and results of operations could suffer, the trading price of our
Equity Shares could decline and you may lose all or part of your investment. In addition, the risks set out in this
section may not be exhaustive and additional risks and uncertainties not presently known to us, or which we
currently deem to be immaterial, may arise or may become material in the future. Unless specified in the
relevant risk factors below, we are not in a position to quantify the financial implication of any of the risks
mentioned below. Any potential investor in, and purchaser of, the Equity Shares should pay particular attention
to the fact that we are governed in India, by a legal and regulatory environment which may be different from
that which prevails in the United States and other countries in some material respects. In making an investment
decision, prospective investors must rely on their own examination of us on a consolidated and standalone basis
and the terms of the Offer including the merits and the risks involved. To obtain a complete understanding of
our business, you should read the sections Our Business and Management's Discussion and Analysis of
Financial Condition and Result of Operations on pages 147 and 254, respectively. If our business, results of
operations or financial condition suffer, the price of our Equity Shares and the value of your investments in the
Equity Shares could decline.
This Draft Red Herring Prospectus also contains forward-looking statements that involve risks and
uncertainties. Our results could differ materially from those anticipated in these forward-looking statements as
a result of certain factors, including the considerations described below and elsewhere in this Draft Red
Herring Prospectus.
In this section, unless the context otherwise requires, a reference to our Company or to we, us and
our refers to HealthCare Global Enterprises Ltd, and its Subsidiaries and LLPs on a consolidated basis.
Unless otherwise stated or the context otherwise requires, the financial information used in this section is
derived from the audited restated consolidated and standalone financial statements of our Company.
INTERNAL RISK FACTORS
1. We and one of our Subsidiaries have reported net losses in the recent Fiscal Years and may be unable to achieve or sustain profitability in the future, which may materially and adversely impact
our business and prospects.
We incurred consolidated net losses amounting to `355.53 million and `105.14 million during Fiscal
Years 2014 and 2013 and standalone net losses amounting to `23.66 million, `394.98 million and
`71.58 million during Fiscal Years 2015, 2014 and 2013, respectively. Our Subsidiary HCG Medi-
Surge incurred net losses amounting to `21.44 million during Fiscal Year 2014. Our and HCG Medi-
Surge's net losses are primarily attributable to insufficient revenue to cover the expenses incurred on
significant amount of debt obtained, and the depreciation expenses resulting from capital investments,
in relation to the operation and expansion of our and HCG Medi-Surge's businesses. Although our
revenue has increased on a year-on-year basis in the recent Fiscal Years and we earned a consolidated
net profit amounting to `5.46 million during Fiscal Year 2015, we may be unable to achieve or sustain
profitability on this revenue growth rate in the future.
We expect to continue to make substantial expenditures in the future to develop and expand our
business, which may result in us incurring future losses. We cannot assure you that we will be able to
realise any profits from such proposed expansions in a timely manner, or at all. In particular, our cancer
care business is capital intensive and new cancer centres require a gestation period to break even, as a
result of which we may not realise any profit corresponding to the amounts spent in a timely manner, or
at all. In the past, we have also experienced delays in executing our cancer care projects due to, among
other things, delays in obtaining requisite government approvals, delays by partners in completing
construction and delivering the facilities, delays by vendors in delivering equipment and changes in the
specification of the facilities due to technical and regulatory considerations, which resulted in
significant cost overruns and reduced profitability. We may also experience time and cost overruns in
the future in relation to our projects under development. Any delays and cost overruns in the future
could materially and adversely impact our profitability. Our growth strategy may also prove more
expensive than we currently anticipate and we may not succeed in increasing our revenue sufficiently
17
to offset any higher expenses. These increased expenditures may impair our ability to achieve or
sustain profitability in the future. Our results of operations and profitability may also be influenced by
the timing of the opening of new centres and the number of new centres opened, as new centres
generally have lower revenue and higher operating expenses initially. See also, Management's
Discussion and Analysis of Financial Condition and Results of Operations Factors Affecting our
Financial Results Expansion of our HCG Network and our Milann Network on page 256.
Our prior losses have had and will continue to have an adverse effect on our business. If we continue to
incur losses in the future or we are unable to achieve or sustain our profitability, our business and
prospects may be materially and adversely affected.
2. There have been incidents of fraud committed by employees of one of our Subsidiaries as well as by senior managers at our cancer centres in the past. If such incidents of fraud were to recur, our
business, reputation and results of operations could be materially and adversely affected.
Our former Subsidiary, HCG Vijay recorded excess revenue amounting to `40.44 million and
corresponding excess balance in trade receivables amounting to `29.86 million and unbilled revenue
amounting to `10.58 million in the past. Of this, `32.79 million was recognised in our consolidated
financial statements for Fiscal Year 2013 and `7.65 million was recognised in our consolidated
financial statements for Fiscal Year 2012. This excess revenue was recorded due to deliberate
recording of fictitious invoices and services as revenue by certain employees of HCG Vijay. For further
details, see Financial Statements on page F-1. In addition, two senior managers of our
comprehensive cancer centres at Kalinga Rao Road and Double Road in Bengaluru had
misappropriated funds amounting to `3.00 million during Fiscal Year 2011.
Although we reversed the excess revenue for HCG Vijay in our consolidated financial statements for
Fiscal Year 2014 and have initiated legal proceedings against the employees responsible for the
fraudulent accounting, and have terminated the employment of the two senior managers at our
comprehensive cancer centres at Kalinga Rao Road and Double Road in Bengaluru, we cannot assure
you that similar incidents will not occur in the future. If such incidents of fraud were to recur, our
business, reputation and results of operations could be materially and adversely affected.
3. Our results of operations are likely to vary from year to year and be unpredictable, which could cause the market price of the Equity Shares to decline.
Our results of operations have historically varied from year to year due to various factors, and we
expect that this trend will continue. You should not rely on our past financial results for any year as
indicators of future performance. Our results of operations in any given year can be influenced by a
number of factors, many of which are outside of our control and may be difficult to predict, including:
political and economic conditions, both in and outside India and in particular, in Africa where most of our international patients come from;
non-availability of specialist physicians and doctors at our centres and hospitals;
the timing of opening and the number of new centres;
outbreak of epidemics, especially in Africa (such as Ebola), which may reduce the number of our international patients;
changes in the competitive landscape in which we operate;
changes in trends of cancer and fertility incidences in and outside India;
government policies which may affect the pricing of our medical services;
adverse publicity or loss of reputation of our centres, hospitals and brands; and/or
any other risk factors described in this Draft Red Herring Prospectus.
See also, Management's Discussion and Analysis of Financial Condition and Results of Operations
Factors Affecting our Financial Results on page 256 for details on the factors affecting our financial
results.
All of these factors, in combination or alone could negatively impact the number of our new patient
18
registrations and may cause significant fluctuations in our results of operations. This variability and
unpredictability could materially and adversely affect our results of operations and financial condition.
4. The success of our business is dependent on our ability to expand our HCG network and our Milann network. If we are unable to successfully expand our HCG network and our Milann network or if
any of our existing centres or hospitals are closed down, our business, financial condition and cash
flows could be materially and adversely affected.
Historically, our business growth has been primarily driven by establishing new centres and hospitals
through various partnership arrangements and acquisitions; and we expect these to continue to be the
key drivers for our future growth. See also, Our Business Our partnership arrangements and
History and Certain Corporate Matters Summary of Key Agreements on pages 155 and 189,
respectively.
The success of our business is dependent on our ability to maintain our relationships with our partners,
to identify suitable partners and acquisitions targets and to undertake new partnership arrangements and
acquisitions. We may be unable to continue to operate our centres and hospitals if there are any
conflicts or disputes with our partners or if our partnership arrangements are not renewed at the end of
their respective terms. In the past, we have received notices seeking termination of our partnership
arrangement with Balabhai Nanavati Hospital pursuant to which we operate our comprehensive cancer
centre in Mumbai, and arbitration proceedings are currently ongoing in this regard. We have also in the
past discontinued operation of our HCG cancer centre at Erode, Tamil Nadu and our HCG day care
chemotherapy centre at Pune due to dispute with our partners. For further details of our disputes with
our partners, see Outstanding Litigation and Material Developments on page 277.
We have also, in the past, discontinued operations of a hospital we had taken on lease in Bengaluru for
economic reasons. In addition, we have withdrawn from a partnership arrangement in Uganda. As a
result of such discontinued operations, we have made significant write-offs of our amounts spent on
these centres and the hospital. We cannot assure you that any of our existing or future centres or
hospitals will not be closed temporarily or permanently in the future due to any business or other
reasons. If any of our existing or future centres or hospitals is closed, whether temporarily or
permanently, we may not derive returns on our amounts spent on such centres and hospitals, and our
business, financial condition and cash flows could be materially and adversely affected.
5. We cannot assure you that we will be able to successfully execute our growth strategies, which could affect our business, prospects and results of operations.
We propose to expand our existing network of cancer centres and fertility centres and strengthen our
brand and market presence by adopting a series of strategies. For further details, see Our Business
Our Strategies on page 151.
Our growth strategies could place significant demand on our management and our administrative,
operational and financial infrastructure. As a result, we may be unable to maintain the quality of our
services as our business grows. We could also encounter difficulties and delays in executing our
growth strategies due to a number of factors, including, without limitation, delays in project execution
resulting in significant time and cost overruns, delays or failure in receiving government approvals,
unavailability of human and capital resources, or any other risks that we may or may not have foreseen.
Our management may also change its view on the desirability of current strategies, and any resultant
change in our strategies could put significant strain on our resources. We may also be unable to achieve
the targeted levels of operations from our future projects. Further, we may be unable to achieve any
synergies or successfully integrate any acquired business into our portfolio. Any business that we
acquire may have unknown or contingent liabilities, including liabilities for failure to comply with
healthcare laws and regulations, and we may become liable for the past activities of such businesses.
Additionally, expansion into new geographic regions, including new regions in India and in Africa will
subject us to various challenges, including those relating to our lack of familiarity with the social,
political, economic and cultural conditions of these new regions, language barriers, difficulties in
staffing and managing such operations and the lack of brand recognition and reputation in such regions.
We may also encounter other additional anticipated risks and significant competition in such markets.
See also, Risk Factors Our expansion into Africa could subject us to additional business, financial
and competitive risks that we may or may not have currently envisaged on page 21. If we are unable
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