Fortis Healthcare to sell Vadapalani Business for Rs 152 crore; stock slips ~2%

23 Jun 2023 , 03:04 PM

On Thursday, Fortis Healthcare Limited announced the signing of definitive agreements for the sale of its hospital business operations in Vadapalani, Chennai, to Sri Kauvery Medical Care (India) Limited for Rs 152 crore.

The healthcare company announced the all-cash transaction in an exchange communication. The divestment agreement is expected to be completed by the end of July 2023.

Ashutosh Raghuvanshi, the Managing Director & CEO of Fortis Healthcare Limited, stated that the decision to divest the Arcot Road hospital business operations aligns with their objective of maximizing the value of their hospital assets, while also considering their primary markets and regions.

This also supports our focus on improving our segment’s overall profitability and margins, allowing us to reallocate capital in our key clusters, he added.

The facility, which is on leased land, opened in October 2020 and is located on the busy Arcot Road. The hospital currently managed 110 operational beds and has the potential to expand its capacity to around 200 beds.

The divestment is a strategic move within Fortis’ ongoing portfolio rationalization strategy, aimed at concentrating efforts on expanding its footprint in specific regions where the company holds substantial presence.

Following this development, Fortis Healthcare was trading 1.52% lower at Rs 304.50, against the previous close of Rs 309.20 on NSE. The counter plunged to an intraday low of Rs 302.65.

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