Dubai: Aster DM Healthcare is looking at a mid-sized IPO in the range of $200-250 million (Dh734-918 million) with the listing to be decided among three candidates — Nasdaq Dubai, a stock exchange in India or on the London bourse. A decision on the likely date to go public will be decided within the company’s current financial year, which ends March 31, 2015.

“A lot of positive energy will get generated on the Indian stock exchange if a clear verdict emerges post the current general elections there,” said Dr Azad Moopen, chairman and managing director at Aster. “Market multiples in India for health care entities are getting better and likely to go up further.

“At the same time, a listing in London gives an international profile; and there’s also Nasdaq Dubai whose prospects can only go up with all that’s happening within the UAE/Gulf.”

Moopen dismisses the suggestion that a stock market listing for his company is more about making a statement than an actual need for funds. “On the contrary, there’s a need for funds, for the six hospitals that are in the pipeline in the Gulf and another three in India,” Moopen said.

A decision on where to list would also depend on the extent of promoters’ holding that needs to be diluted as per an individual bourse’s requirement. In London, that would be 25 per cent while India has a more favourable view on that, requiring only 10 per cent.

Currently, 62 per cent in Aster DM Healthcare is held by the original promoter, and 32 per cent is with venture capital partners. Once the IPO is done, the latter’s shareholding will be reduced by a good extent.

Healthcare providers with a sizable UAE presence have been active on the IPO route. Both NMC Health and Noor Hospitals Group chose to do it on the London Stock Exchange, respectively raising 117 million pounds and 221 million pounds.

Corporate governance

Would bourses here now prove attractive for companies going public? “In the UAE many of the factors that are important in my mind for a stock market listing have been developed to a point where a listing appears feasible — management team with internationally experienced managers, strong corporate governance, board and committee structures, strong compliance department, transparency in financial affairs, to name but a few,” said Dr Helmut Schuehsler, chairman and CEO of TVM Capital Healthcare, which has raised more than $900 million for health care related investments.

“I think it is natural that the UAE would lead the charge on public listings. But as other markets mature they will also create companies that will seek public listings in due course, maybe on local or regional markets, maybe also internationally, like NMC and Al Noor.

“I would say companies listing outside of the their country of domicile should do so with caution as our general assessment is that this does not work in the long run. [Local] regulators need to address some fundamental obstacles to make it a more attractive option.”