Max Healthcare Institute shares in focus as co to buy 64% stake in Jaypee Healthcare

Shares of Max Healthcare Institute Ltd are in focus on Monday morning after the company announced acquisition of a controlling stake in Jaypee Healthcare, which owns three hospitals, one each in Noida, Bulandshahr and Anoopshahar. The acquisition is based on an enterprise value of Rs 1,660 crore, Max Healthcare said in a BSE filing.

Jaypee Healthcare is undergoing Corporate Insolvency Resolution Process and that only two of its hospitals -- Noida and Bulandshahr, are presently operational. Max Healthcare Institute would organise debt for repayment of admitted claims of the financial creditors of Jaypee Hospital and would simultaneously acquire 64 per cent stake in the company, with call and put option for the remaining stake.

The transaction, which includes will be consummated in the next 30 days, in line with the revival plan approved by the National Company Law Appellate Tribunal (NCLAT). The revival plan is designed to provide sustainability to the operations of Jaypee Hospitals through appropriate measures to enhance operational efficiency while building confidence among various stakeholders, Max Healthcare said.

Max Healthcare Institute shares are up 32 per cent in 2024 so far and 56 per cent in the past one year. The stock hit a 52-week high of Rs 979.80 on June 21. It closed at Rs 908.70 on Friday, down 0.43 per cent.

Max Healthcare said Jaypee Healthcare has a strong market position, which includes two operational hospitals i.e. 500-beds Jaypee Hospital Noida and 200-beds Jaypee Hospital Bulandshahr, built on land parcel of 18 acre and 5.75 acre respectively.

"Further JHL also owns a 100-beds hospital spread over 2.35 acres at Anoopshahar, which is currently non-operational. JHL reported revenue of Rs 421 crore and Ebitda of Rs 70 crore for the year 2023-24," Max Healthcare said.

Abhay Soi, Chairman and Managing Director at Max Healthcare Institute said his company remained focused on formulating a comprehensive strategy that addresses the demands of all stakeholders involved while prioritising the delivery of quality healthcare services in a sustainable manner and potentially expand the flagship Noida facility to 1,200 beds over next few years.

With the proposed transaction and collaboration with Max Healthcare as strategic partner to the revival plan, Jaypee Healthcare is well positioned for potential growth and continued services to the community.